Hormuz Closure Sends Oil To $93

Iran's military declared the Strait of Hormuz closed to commercial shipping on June 11, after new US strikes turned a three-month confrontation into direct threats against tanker traffic (Reuters via Internazionale). Brent crude traded near $93 a barrel (Straits Times).

Europe is not about to run out of gas. The problem is more familiar, and more politically awkward: every cargo now costs more, and the EU has only limited power over the global auction setting that price.

The Global Bidding War

Hormuz normally carries roughly 20 million barrels of oil per day, about a quarter of all seaborne oil trade (EIA). Qatar, whose LNG leaves through the strait, supplied around 8.2% of EU LNG imports in 2025 (S&P Global).

That looks manageable until you follow how gas is actually priced. If Gulf LNG is pulled out of Asian markets, Asian and European buyers chase the same remaining cargoes. The last available shipment sets the price for everyone else.

Europe's benchmark gas price, TTF, hit $14.80/MMBtu for the week ending April 24, 35% above pre-closure levels (EIA). Hormuz does not have to be sealed completely for Europe to feel the squeeze. It only has to become risky enough for shipowners, insurers and charterers to decide the voyage is no longer worth it.

Lloyd's Market Association data shows the change already under way. Since early March, only 111 cargo-vessel transits were recorded, with more than 60% believed to have an Iranian nexus or negotiated consent to pass (LMA).

The strait has become a filtered corridor. Insurance, naval risk and political permission now decide who moves and who waits.

Europe is adjusting, but the adjustment carries a bill. From March to May, the US share of EU LNG imports rose from 56% to 60%. Norwegian LNG to the EU jumped 84% year on year. Russian LNG rose 25% (Euronews). The EU is finding gas, but at a higher price and, in some cases, from suppliers it spent years trying to rely on less.

Emergency Stocks Won't Cover Prices

The European Commission, the EU's executive arm, requires gas storage to reach 90% before winter (Commission). ICIS warned in early June that, if slow injection rates continued, EU storage would reach only about 73% by November, well below the target going into heating season (ICIS).

The Gas Security of Supply Regulation, the EU framework for coordinating emergency responses and protecting households during shortages, creates solidarity obligations between member states (EUR-Lex). It cannot produce LNG cargoes that are not there.

Oil has its own buffer. EU law requires 90 days of emergency stocks, and the IEA can coordinate releases. Those reserves matter if physical supply breaks down. They do not cap the price paid by households, hauliers, factories or power suppliers.

A Commission crisis-strategy document published this spring set out the dependency plainly: 57% of EU energy still comes from imported fossil fuels, and the bloc has absorbed an additional €24 billion in energy-import costs since March (AccelerateEU).

Two Responses, One Bill

Member states face the same global price, but their politics are moving in different directions. Italy's foreign minister Antonio Tajani ruled out any solo military mission, saying deployment would need an EU or UN mandate and fresh parliamentary approval (Adnkronos).

Spain's Banco de España described the war's economic impact as "contained" in its central scenario. Its adverse scenario, though, put Brent at $145 and inflation at 6.8% (Cadena SER). Spain's foreign minister José Manuel Albares separately called for negotiation over military action (La Moncloa). The distance between those two Spanish scenarios shows how little certainty any European government can honestly claim.

The same absence runs through every capital: no government has published a clear exposure table showing which cargoes, contracts, terminals and storage positions depend on Gulf flows. The public argument is built from scenarios and reassurance. The cargo-level detail remains with traders.

Until that changes, European citizens cannot judge whether they are looking at a supply crisis, a price shock or a maritime-security problem that mainly rearranges the global market. The evidence points first to a price shock, and it has already arrived. Whether storage fills fast enough before winter, or diplomacy reopens the strait before then, is now the question sitting behind every energy bill.