Escalating tensions in the Middle East and uncertainty over U.S. LNG exports combined Monday to push European natural gas prices higher.

Despite weak fundamentals, “geopolitics remain in focus” for the global energy market, said Schneider Electric analyst Robbie Fraser. Three U.S. servicemen were killed in a drone strike in Jordan over the weekend that was linked to Iran. While crude prices retreated Monday, the risk of an oil price spike and its impact on other commodities remains, especially given Iran’s link to the Houthi militants attacking commercial vessels in the Red Sea. 

The United States has pledged a response to Sunday’s drone strike. The security situation in the region has forced dozens of natural gas and propane carriers to avoid the Red Sea and take...