Hormuz Crossings Fall To 12

The Strait of Hormuz is still open, but shipping is moving through it with one eye on the horizon and the other on the insurance bill. Commodity-vessel crossings fell 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 getting through, but the commercial signal is weak: the five-day average before the weekend was just 27% of the pre-disruption baseline of about 110 daily crossings (PortNews).

For Europe, the first effect is on price and confidence rather than empty tanks. That still matters, including in Ireland, where imported energy costs and ECB rates feed quickly into business margins and household bills.

Freight and Insurance Jump First

The cost chain from Hormuz to European factories is short. When safe crossings become less certain, fewer shipowners are willing to take the risk. Freight and insurance then move within days.

Tanker-hire rates on Gulf routes rose 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, is 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 land first on oil, gas and chemical shipments as cargoes are booked. European producers then face dearer inputs. Some pass that cost on. Others absorb it and cut investment.

The ECB, the European Central Bank that sets interest rates for the 20 eurozone countries, estimates the energy shock could reduce eurozone growth by 0.4 percentage points and has raised its deposit rate to 2.25% (ECB, Boursorama/Reuters). Its concern is familiar: a supply disruption becomes harder to manage if firms and households start behaving as though higher prices are here to stay.

Italy’s Factories Feel It First

Italy gives the clearest factory-floor picture of what this looks like. 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’s pressure point is slower, but no less real: fertiliser. Domestic urea prices are elevated, and with fertilisers accounting for up to half of farm costs, food-price inflation can arrive with a delay (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 are treating that relief as fragile while freight and insurance remain high.

The winners are easy enough to identify. Shipowners and brokers collecting inflated charter rates gain. Insurers repricing war-risk cover gain. Energy-intensive manufacturers, smaller firms without hedging, meaning pre-purchased price protection, and eventually consumers carry the cost as it moves through supply chains.

Ship Counts Don’t Tell the Whole Story

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

The next week will tell whether this was a weekend shock or the start of a more expensive summer. If seven-day crossing averages recover and war-risk premiums keep falling, the disruption will have been a scare. If vessel counts stay volatile and industrial buyers keep reporting delayed or repriced inputs, Europe’s problem will not be a shortage. It will be a cost shock that factories, consumers and central bankers cannot comfortably look past.