Iran Shuts Strait of Hormuz

Iran has declared the Strait of Hormuz closed. The United States struck back within hours. Ships are still moving through the waterway. Taken together, those facts tell you less than they seem to. For European commerce, the real question is whether the people who make shipping possible — captains, insurers, banks and flag states — still regard the route as usable in the ordinary way.

On July 12, Iran's Revolutionary Guard Corps attacked a Cyprus-flagged container ship, the M/V GFS Galaxy (Straits Times/Reuters). Tehran then declared the strait closed for the fourth time since June. Each round has followed a familiar pattern: a declaration, an attack, then a partial return of traffic. Each time, the people carrying the risk have become more wary.

The declaration has no legal force. UNCLOS, the UN framework governing the use of the seas, bars coastal states from blocking transit through international straits (UNCLOS Part III). But Iran is not relying on law. Its leverage lies in the commercial machinery around the waterway.

The Three Gates That Keep a Shipping Lane Alive

A shipping lane can become commercially unusable before it is physically blocked. Three systems have to keep working for a vessel to sail: the maritime warning channels used by commercial operators must judge navigation to be safe enough, insurers must provide war-risk cover at a price that can be borne, and banks must be willing to clear payments without creating sanctions exposure.

All three are now under pressure. The US-backed Joint Maritime Information Center, which commercial shippers use for threat assessments, has directed vessels towards an expanded southern route and classified the Hormuz threat as severe (Mint). War-risk insurance briefly rose to 10% of a ship's value before easing back to about 1–3%, with prices in some cases being set only hours before departure (CNN). Premiums have stayed high even after traffic partly recovered (Insurance Asia).

Then there is the sanctions problem. Iran wants ships to use a route it approves. The US Treasury has warned that payments or guarantees for safe passage involving IRGC-linked entities can trigger sanctions exposure (OFAC). A shipper that follows the Iranian channel may create a legal and financial liability. A shipper that ignores it takes on greater physical and insurance risk. The three gates are no longer pointing in the same direction.

Europe May Avoid Shortages and Still Pay More

Europe is less directly dependent on Hormuz than crisis coverage often suggests. Spain says only about 5% of its oil and 2% of its gas passes through the strait, with more than 90 days of reserves behind it (El País, Infobae/EFE). Poland's gas-import capacity is now 63% above consumption, after years spent replacing Russian supplies (Business Insider Polska).

That does not make Europe insulated. In normal times, Hormuz carries an estimated 20–25% of global oil trade (HVG 360). When that flow looks vulnerable, benchmark prices move, and the effect travels quickly into European fuel costs. Hungary's diesel benchmark jumped almost 13% in one session while crude rose about 6% (Telex/G7). The European Commission has acknowledged that price escalation, rather than physical shortage, is its main concern (El Periódico de la Energía). Fatih Birol, head of the International Energy Agency, put it more sharply: it would be "a grave error" for Europe to think it was already safe (Euronews).

Who Decides Whether Ships Actually Sail

France and Britain have taken the clearest European military line: defend navigation, anchor the effort through Oman, and keep it separate from Washington's strike campaign (French communiqué). NATO allies have discussed Hormuz with Gulf states, but any deployment would require a fresh political decision (NATO, Reuters/KFGO). The EU already has Aspides, a defensive mission in the Red Sea. It protects merchant ships; it was not built to fight a state navy (Council Decision 2024/583).

Even escorts cannot answer the commercial question on their own. Malta, one of Europe's largest ship registries, has issued no detectable public guidance to its fleet despite the severe threat classifications. Under UNCLOS, Malta must supervise ships flying its flag. Its silence shows where the real decisions are being made: by underwriters setting war-risk premiums, compliance officers screening payments, and registry officials weighing liability. They are the people who decide whether European-linked ships sail in practice.

The route remains open. Making it commercially usable again requires flag states, insurers and banks to say clearly what conditions they need. So far, they have not.