Hormuz LNG Traffic Falls Sharply

Brent crude moved from about $70 to $79–80 a barrel within days (Süddeutsche Zeitung). LNG carrier transits through the Strait of Hormuz fell from 13 in one week to just two (Lloyd's List). More than 30% of global seaborne crude passes through that narrow stretch of water between Iran and Oman. No government has formally shut it. The market is doing something almost as effective: treating the route as too risky to use normally.

For Malta, this is not a distant Gulf story. An island economy imports its fuel, runs on shipping, and feels energy costs quickly through transport, electricity, food distribution and the price of keeping businesses open from Il-Belt to the industrial estates. When Hormuz becomes commercially unreliable, the cost does not stay in the Gulf.

On July 8, Trump declared the 60-day US-Iran deal dead and Washington revoked Iran's temporary oil-sales waiver after further tanker attacks. US Central Command launched new strikes on Iranian targets, which NATO's Mark Rutte called "absolutely necessary".

The memorandum signed on June 17 was meant to create space for sanctions and nuclear talks. It did not give shipowners the three things they needed: safe voyages, insurance at a workable price, and banks prepared to process the trade. A deconfliction hotline agreed in Switzerland went untested.

On June 25, the Singapore-flagged Ever Lovely was hit near Oman. The US struck Iranian coastal targets the next day. Iran retaliated against Gulf bases on June 27. Each exchange made the ceasefire look less like a pause and more like another stage in the conflict. For Europe, including Malta, the test is whether ships, insurers, banks and charterers still behave as if Hormuz is a normal passage. They do not.

How the Price Lands

Europe's direct crude imports from the Gulf are smaller than the headlines imply. Germany sourced 6.1% of its crude from the Middle East in 2025 (Destatis). Spain's share was 5.5% in May 2026 (Europa Press). But oil benchmarks do not price according to a country's import map. When Hormuz becomes risky, Brent reprices globally, and every European refinery, haulier, airline, household and small business absorbs the change.

Gas moves faster. German spot gas reached €45.2/MWh, up from around €30/MWh at the start of the year (BDEW). Gas-price volatility had already added €13 billion to the EU wholesale electricity bill by mid-April (EEA). For Malta, where energy pricing is always a political issue as much as an economic one, that matters even when the immediate fiscal choices are taken in Castille rather than Brussels.

Italy shows the cost of substitution. Italian terminals received 113 LNG cargoes in the first half of 2026, 70 from the United States (MarketScreener), as Qatari supply collapsed. According to Prima Pagina News, QatarEnergy declared force majeure, meaning it says the disruption is beyond its control, on deliveries to Italian utility Edison, cancelling 21 cargoes since April. Every replacement cargo bought on the spot market costs more.

Spain turned the shock into fiscal policy. Madrid's fuel-tax support starts at 15 cents per litre in July, with a total package costing more than €1.825 billion (Hacienda, Agencia Tributaria). These measures cushion households and firms. They do not persuade a tanker to sail.

Who Controls What

The hierarchy of power is clear. The US can tighten or relax OFAC sanctions on Iran by executive action much faster than Europe can organise a naval escort. Navies can lower physical risk: France and the UK secured Oman's agreement on July 3 to help patrol its waters, and a multinational mine-clearance mission involving around 30 states is moving forward. Italy's Meloni said Rome would not join strikes but could contribute on Hormuz in forms authorised by its parliament (Il Fatto Quotidiano).

But commerce does not resume because diplomats say it should. Insurers and banks decide whether the route is usable. To normalise Hormuz, loaded tankers would have to transit safely for weeks, bringing war-risk premiums down. Banks would also have to process Gulf-linked trade without fearing exposure to US sanctions. Neither condition is close. Lloyd's List reports that Hormuz is already producing charterparty and marine-insurance disputes that will take months to unwind.

The ECB has warned that a persistent Middle East energy shock would raise inflation and lower growth. EU member states hold compulsory emergency oil stocks under Directive 2009/119/EC, the law requiring 90 days of reserves. But central banks cannot reopen shipping lanes, and stockpiles buy time rather than normality. Europe, Malta included, keeps paying the premium for a strait that remains politically open and commercially unreliable.