Hormuz shipping attack hikes EU gas 35%

Iran declared the Strait of Hormuz closed. The US says ships keep moving. Both claims matter less than the decisions now being made in London insurance offices, bank compliance departments and shipowner boardrooms. These private gatekeepers are repricing Europe's energy access one voyage at a time.

Iran's Revolutionary Guard struck the GFS Galaxy, a cargo vessel sailing under the Cyprus flag (making it an EU-registered ship with European crew and liability obligations), on July 12. The attack damaged its engine room and left one crew member missing (Times of Israel). Tehran announced the strait closed "until further notice." The US military answered with fresh strikes and insisted commercial traffic continued (SOFX).

Between those two claims lies the gap where European energy costs are set.

The private veto no government can override

War-risk insurance, the extra cover protecting ships against conflict damage, has become the choke point. Before the crisis, premiums ran at roughly 0.25%-0.5% of a vessel's hull value. At peak, they hit 10% (CNN). Current quotes sit around 2%-6%, and fewer owners are even requesting them (Claims Journal). Policies now cover seven-day windows, priced just hours before departure.

The sanctions layer may matter more than headline premiums. The Lloyd's Market Association (the body that coordinates London's dominant marine-insurance market) warned that paying Iranian port fees or transit charges could expose European financial institutions to sanctions violations (LMA). US Treasury guidance tells shipping companies to verify cargo origin, scrutinise vessel histories and build contractual exit clauses (Katten). A voyage can become unfinanceable if a bank's compliance team will not clear it, even when the water is calm.

Traffic has recovered, from about 27 transits per day in late June to more than 60 within days (Insurance Asia). Breakwave Advisors reported on July 8 that the latest attacks had not changed shipowners' behaviour (Breakwave Advisors). But premiums stay elevated because insurers price future disruption, not today's vessel count.

Governments can escort convoys, impose sanctions, issue warnings and offer subsidies. They cannot order Lloyd's syndicates or bank compliance desks to treat a Gulf voyage as normal.

Price shock, not blackout

Europe's vulnerability runs through prices, not pipelines. Qatar accounts for nearly 19% of global LNG exports (IGU), and all of it passes through Hormuz. When Qatari cargoes slow, European and Asian buyers bid against each other for replacements. Europe's TTF gas benchmark (the reference price that feeds into household and industrial energy bills) has already climbed roughly 35% above pre-closure levels (EIA).

Refined products sharpen the exposure. BNP Paribas research found that Asia and the Middle East supplied 23% of European diesel imports and 90% of jet-fuel imports in 2025 (BNP Paribas). A Hormuz disruption does not just raise heating bills. It reaches logistics, aviation and manufacturing.

Two country examples show how broadly the shock travels. Ireland's energy regulator stepped up engagement with suppliers after several announced 8%-11% price increases, and diesel pump prices there are expected to rise by about 10 cents per litre (Irish Times, RTÉ). Spain proves that physical resilience does not equal price immunity. Gas stocks sit at 73%, well above the EU average, and the country holds the bloc's largest regasification capacity (La Voz de Galicia). Yet Spanish consumers still pay a gas price set by global LNG competition, where any Qatari disruption reprices every marginal cargo.

The accountability gap

Hormuz is not closed, but it is no longer commercially normal. Did the GFS Galaxy attack change insurer terms for EU-flagged vessels? Have banks refused Hormuz-linked payments? Were LNG cargoes delayed after the July 6 strikes? Those answers sit with Lloyd's syndicates, P&I clubs (the mutual insurers covering crew, pollution and collision liability) and compliance desks. These actors owe no public disclosure. Europe's energy bill is being shaped by decisions no voter authorised and no parliament can review.