Hormuz premiums hit 4% after strike

On June 25, an unknown projectile struck the bridge of the Ever Lovely, a Singapore-flagged container ship passing through the Strait of Hormuz (DW, Channel News Asia). No one was injured and the vessel remained seaworthy. But it had been using a safe-passage route recommended by UKMTO, the UK authority that coordinates commercial shipping through conflict zones. Within hours, the confidence slowly rebuilt after the recent US-Iran diplomatic opening had gone again.

The International Maritime Organization, the UN body responsible for global shipping safety, suspended its Hormuz evacuation corridor after moving 115 ships and about 2,500 seafarers out of the Gulf. More than 500 vessels were left waiting (UN News, Al Jazeera). Iran's Revolutionary Guards added another layer of confusion by saying safe passage was available only on Iranian-designated routes, dismissing the corridor on the Oman side.

US Central Command then struck Iranian missile, drone and radar sites, saying the Ever Lovely had been hit by an Iranian attack drone (CENTCOM). Tehran denied responsibility. Neutral maritime authorities stuck to the narrower formulation: an "unknown projectile", with no attacker named (ICIS).

For Europe, the more immediate question is less who fired than what the insurance market did next.

Insurance, Not Artillery, Decides Whether Ships Sail

About 19.8 million barrels of oil a day normally move through the Strait of Hormuz (BNP Paribas). The strait does not have to be formally closed to hurt Europe. It only has to become too expensive to insure.

War-risk cover, the extra premium underwriters charge for voyages through dangerous waters, was still available after the strike. The problem was the price. Premiums rose to about 3-4% of hull value, from roughly 0.25% before the conflict (S&P Global). For a $100m supertanker, that means roughly $2-3m, renewed every seven days (Caixin).

Those costs reach European households through freight rates and energy benchmarks before they ever show up as empty terminals. The European Commission said there was no immediate supply risk and that it could coordinate emergency oil stocks through the International Energy Agency (European Commission). Christine Lagarde, the ECB president, put the limit of official power plainly: the central bank "cannot reopen the Strait of Hormuz" (ECO). Europe can manage a price shock. It cannot order insurers, shipowners and classification societies to treat the route as workable.

Who Sends Ships, and Under What Rules

Three EU states with serious navies have each reached a different answer.

France wants a UN-mandated maritime mission, looking for international legal cover so any deployment cannot be presented as joining a US combat operation against Iran (Arab News). Italy's defence minister, Guido Crosetto, has signalled conditional readiness for demining or escort work, while insisting any deployment would need government and parliamentary approval (Adnkronos). Germany is constrained by its Parlamentsbeteiligungsgesetz, the law requiring Bundestag approval for armed deployments abroad, which makes a rapid role unlikely. Defence minister Boris Pistorius has kept expectations low (tagesschau).

The clearest EU-level instrument is Operation ASPIDES, the defensive naval mission now protecting Red Sea shipping from Houthi attacks. The EU's diplomatic service has proposed retasking ASPIDES to take the main Hormuz mine-clearing role, according to Internazionale/Reuters. But changing the mandate of a CSDP mission, the EU framework for joint military operations, requires unanimity among all 27 member states. France, Germany and Italy are each facing different domestic legal thresholds. The consensus is not there yet.

The Ever Lovely was hit and kept going. The harder question is whether the Strait of Hormuz remains open on navigation charts while closing in insurance spreadsheets: legally passable, but commercially frozen.