Hormuz ship traffic drops to 12 crossings

Commodity-vessel crossings through the Strait of Hormuz dropped from 29 on Saturday to 12 on Sunday after fresh attacks on ships in the narrow waterway between Iran and Oman (Punch, WSJ). The strait carries roughly a fifth of the world's traded oil and liquefied natural gas (CNN). Ships are still moving through it, but commercially the corridor remains deeply unstable: the five-day average before this weekend stood at just 27% of the pre-disruption baseline of about 110 daily crossings (PortNews).

This is a price and confidence shock, not an immediate physical shortage. Europe is already feeling it.

Freight and Insurance Jump First

The cost chain from Hormuz to European factories is short. Fewer safe crossings mean fewer willing shipowners, which pushes up freight and insurance within days. Tanker-hire rates on Gulf routes jumped to roughly $190,500 per day from $106,500 a week earlier, with some cargoes earning nearly $470,000 per day (Indian Express). War-risk insurance, the extra premium shipowners pay to sail through a conflict zone, sits at around 3% of a vessel's value. That is down from 5% at the peak but still twelve times the roughly 0.25% charged before the conflict (IndexBox). More than 1,000 ships remain stuck in the Gulf waiting for safe passage (n-tv).

Those higher freight and insurance costs hit oil, gas and chemical shipments as they are booked. European producers then face steeper input prices. Some pass them on to customers. Others absorb the hit and cut investment instead.

The ECB (the European Central Bank, which sets interest rates for the 20 eurozone countries) estimates this energy shock could reduce eurozone growth by 0.4 percentage points, and has raised its deposit rate to 2.25% (ECB, Boursorama/Reuters). The central bank's worry is that firms and households start expecting prices to stay high, turning a supply disruption into persistent inflation.

Italy's Factories Feel It First

Italy shows the most concrete factory-level pain. Steelworks in Brescia are considering shutting furnaces during peak electricity hours. A local industry survey found 64% of firms facing raw-material cost increases, with rerouted shipments adding up to 18 days of delay (Giornale di Brescia). Italy's SME lobby reported gas prices up 38% and electricity up 11% since the crisis began (Confartigianato).

Poland faces a slower-burning problem through fertilizer. Domestic urea prices are elevated, and with fertilizers accounting for up to half of farm costs, food-price inflation is a delayed but real channel (Top Agrar). In the Netherlands, TTF, Europe's main gas benchmark for next-month delivery, fell to around €41.68 per megawatt-hour as some LNG tanker movement resumed (Baird Maritime). Dutch analysts treat that relief as fragile while freight and insurance stay elevated.

Shipowners and brokers collecting inflated charter rates gain. Insurers repricing war-risk cover gain. Energy-intensive manufacturers, small firms without hedging (pre-purchased price protection), and eventually consumers absorb the cost as it works through supply chains.

Ship Counts Don't Tell the Whole Story

One important caveat: ship counts are not tonnage. Three large tankers alone carried 4.1 million barrels out of the Gulf in a single day, meaning a handful of loaded vessels can outweigh dozens of smaller or empty ones (New Indian Express). UBS expects nearly 80% of disrupted oil supply to return within three months, and pipeline alternatives from Saudi Arabia and the UAE could bypass the strait entirely for some flows (CNN).

The test over the next week is simple. If seven-day crossing averages recover and war-risk premiums keep falling, the weekend drop was a scare. If vessel counts stay volatile and industrial buyers report delayed or repriced inputs, Europe would not have a shortage story. It would have a cost story that factories and central bankers cannot ignore.