OSLO, March 12 (Reuters) - Europe should refrain from

capping the market price of natural gas even if costs are

soaring due to the war in the Middle East, the prime minister of

major supplier Norway said on Thursday.

The continent's benchmark front-month TTF gas contract

has risen some 60% following the outbreak of the

U.S.-Israeli war on Iran and Tehran's attacks on ships in the

Strait of Hormuz.

The European Union is considering measures to curb energy

prices, including by setting a cap on gas prices, European

Commission President Ursula von der Leyen said on Wednesday.

But while capping the price could be tempting, it would only

lead to bigger problems by raising demand at a time of shrinking

supply, Norway's Prime Minister Jonas Gahr Stoere said.

"It doesn't solve the challenge we are facing," Stoere told

an energy conference in Oslo.

Norway, Europe's biggest supplier of natural gas, will

remain a reliable provider of energy to the continent, he said.

Europe refrained from triggering gas price caps during a

surge in prices following Russia's 2022 full-scale invasion of

Ukraine, and Norway will continue to argue against such a cap,

Stoere said.

Even before oil ⁠and gas prices rose, Brussels had been

drafting proposals to provide relief to industries that say high

energy prices mean they cannot compete with rivals in ​China and

the United States.