Hormuz attack lifts EU gas 35%

Iran says it has closed the Strait of Hormuz. The United States says ships are still moving. For Malta, and for the rest of Europe, the real decision is being taken elsewhere: in London insurance offices, bank compliance departments and shipowner boardrooms.

Those private gatekeepers are now repricing Europe's access to energy one voyage at a time.

Iran's Revolutionary Guard struck the GFS Galaxy, a cargo vessel sailing under the Cyprus flag, on 12 July. That matters because a Cyprus-flagged ship is an EU-registered vessel, with European crew protections and liability obligations attached to it. The attack damaged the engine room and left one crew member missing (Times of Israel). Tehran then announced the strait closed "until further notice". The US military responded with fresh strikes and insisted commercial traffic was continuing (SOFX).

The cost of European energy is being set in the space between those two claims.

The private veto no government can override

War-risk insurance has become the real choke point. This is the extra cover a ship needs when it sails through a conflict zone. Before the crisis, premiums were roughly 0.25%-0.5% of a vessel's hull value. At the peak, they reached 10% (CNN). Current quotes are around 2%-6%, with fewer owners even asking for them (Claims Journal). Policies now cover seven-day windows, priced only hours before departure.

For a maritime country like Malta, this is not a distant shipping-market detail. The island lives off sea lanes, port services, fuel logistics and a registry whose credibility depends on the idea that flags, crews and insurers can still function under pressure. When risk is priced voyage by voyage, the cost does not stay in the Gulf. It travels through freight, fuel and eventually the household bill.

The sanctions layer may prove even more important than the premium itself. The Lloyd's Market Association, which coordinates London's dominant marine-insurance market, has warned that paying Iranian port fees or transit charges could expose European financial institutions to sanctions breaches (LMA). US Treasury guidance tells shipping companies to verify cargo origin, scrutinise vessel histories and include contractual exit clauses (Katten). A voyage can become unfinanceable if a bank compliance team refuses to clear it, even if the sea itself is calm.

Traffic has recovered, from around 27 transits a day in late June to more than 60 within days (Insurance Asia). Breakwave Advisors reported on 8 July that the latest attacks had not changed shipowners' behaviour (Breakwave Advisors). Premiums remain high because insurers are pricing the next disruption, not today's vessel count.

Governments can escort convoys, impose sanctions, issue warnings and offer subsidies. They cannot instruct Lloyd's syndicates or bank compliance desks to treat a Gulf voyage as normal.

Price shock, not blackout

Europe's vulnerability runs through prices, not pipelines. Qatar accounts for nearly 19% of global LNG exports (IGU), and all of it passes through Hormuz. When Qatari cargoes slow, European and Asian buyers compete for replacements. Europe's TTF gas benchmark, the reference price that feeds into household and industrial energy bills, has already climbed roughly 35% above pre-closure levels (EIA).

Malta does not buy its energy in a separate Mediterranean bubble. Its electricity prices, industrial costs and fuel pressures sit inside the same European market logic, even when the physical cargo never comes near Marsaxlokk. A global LNG squeeze becomes domestic policy once it reaches Enemalta, industry, transport and the cost of running a home through summer heat.

Refined products widen the exposure. BNP Paribas research found that Asia and the Middle East supplied 23% of European diesel imports and 90% of jet-fuel imports in 2025 (BNP Paribas). A Hormuz disruption does not only raise heating bills. It reaches logistics, aviation and manufacturing.

Two country examples show how broadly the shock travels. Ireland's energy regulator increased engagement with suppliers after several announced 8%-11% price increases, while diesel pump prices there are expected to rise by about 10 cents per litre (Irish Times, RTÉ). Spain shows that physical resilience is not the same as price immunity. Its gas stocks are at 73%, well above the EU average, and it has the bloc's largest regasification capacity (La Voz de Galicia). Spanish consumers still pay a gas price shaped by global LNG competition, where any Qatari disruption reprices every marginal cargo.

The accountability gap

Hormuz is not closed, but it is no longer commercially normal. Did the GFS Galaxy attack change insurer terms for EU-flagged vessels? Have banks refused Hormuz-linked payments? Were LNG cargoes delayed after the 6 July strikes?

The answers sit with Lloyd's syndicates, P&I clubs, the mutual insurers covering crew, pollution and collision liability, and bank compliance desks. These actors are not required to disclose their decisions publicly.

Europe's energy bill is being shaped by choices no voter authorised and no parliament can properly review. In Malta, where dependence on imported energy is a fact of geography rather than ideology, that distinction matters.