France and Italy in direct talks with Iran – Begging for Hormuz to open

France and Italy have initiated contacts with Iran to negotiate an agreement that will ensure the safe passage of their commercial vessels through the strategically vital Strait of Hormuz, according to a Financial Times report citing sources with knowledge of the discussions. The talks are taking place amid intense concern over maritime security in this critical sea passage, through which approximately one-fifth of the global oil trade flows. Tensions in the region, following the war that has erupted in the Middle East, have led to attacks on tankers and significant disruptions in energy markets. According to the same report, the initiative by Paris and Rome reflects the growing anxiety in Europe regarding the risk of energy flow interruptions and the skyrocketing of oil prices, which have already approached $100 per barrel. Simultaneously, the talks have triggered disagreements within Europe, as some countries appear skeptical of direct contacts with Tehran. This development comes as European governments also consider military measures to protect navigation, such as ship escort missions or international naval missions, should the situation in the Strait of Hormuz continue to deteriorate.

Strait of Hormuz: The global economic "slaughterhouse"

The oil market often appears cold and indifferent. It has survived revolutions, economic wars with sanctions, pandemics, and navigation blockades. But there is a critical point that cannot be disturbed without global consequences: the Strait of Hormuz. And Europeans know it well. When a major conflict breaks out there, we are no longer talking about a simple drop in stock market prices. The risk is systemic and can, within a few days, cause inflation, paralysis of commercial logistics, budget gaps, and political crises. The attacks by the US and Israel against Iran triggered exactly this scenario.

Massive flows through Hormuz

The Strait of Hormuz is often described as a "bottleneck," and it is not a metaphor; it is a technological reality. Through the Strait pass massive flows of raw materials and fuels that cannot be replaced quickly or economically by other routes. The Strait of Hormuz, which connects the Persian Gulf with the Indian Ocean, is located between Iran and Oman. Its vulnerability is due to its narrow width (about 50 kilometers) and its depth, which does not exceed 60 meters. It is undoubtedly the primary shipping lane connecting the oil-rich countries of the Middle East with the rest of the world. The Secretary-General of the International Maritime Organization (IMO), Arsenio Dominguez, recently called on shipping companies to avoid the area. "Ships should refrain from transiting the affected zone until the situation improves," he emphasized, urging maximum caution.

One quarter of global trade

According to the US Energy Information Administration (EIA), in 2024 and the first quarter of 2025, over one-quarter of the global maritime oil trade and about one-fifth of global oil and petroleum product consumption passed through Hormuz. Simultaneously, about one-fifth of the global liquefied natural gas (LNG) trade passes through the strait, with a significant portion of this flow originating from Qatar. The International Energy Agency estimates that global demand for oil in February 2026 was 104.87 million barrels per day. Asian countries, particularly China, India, Japan, and South Korea, account for over 80% of the crude oil passing through the Strait of Hormuz. In 2025, crude oil imports in China reached a historic record of 11.6 million barrels per day. Alternative routes do not have sufficient capacity to replace the sea route. Saudi Arabia's East-West pipeline has a capacity of 5 million barrels per day, while the United Arab Emirates transports 1.5 million barrels daily to the port of Fujairah. These routes cover less than 40% of China's export region.

The threat to Asia

China faces an immediate threat to its industrial sector. The Strait of Hormuz is critical for the country's energy security, providing half of its oil imports, and any disruption threatens production, the national power grid, and GDP. Among Asian countries, Thailand, India, Korea, and the Philippines are hit hardest by rising oil prices due to their dependence on imports. Conversely, Malaysia, as an energy exporter, may partially benefit from the situation. Financial markets reacted immediately. Stock exchanges in Europe and Asia recorded losses of 4%-8% after five days of armed conflict. Regional airlines ceased operations. Dubai International Airport served 95.2 million passengers in 2025 across 291 routes. Iranian attacks on Persian Gulf infrastructure led to an indefinite suspension of operations. The reduction of daily supply by 20 million barrels caused an immediate rise in the price of Brent. Markets estimate the price could exceed $100 per barrel if the blockade continues. Rising energy prices increase fuel costs and affect shipping and global supply chains.

Increase in oil prices

"In the event of prolonged disruptions to transit through Hormuz, the price of oil may remain above $100 per barrel, especially if energy facilities in the region are attacked," warned the political risk firm Eurasia Group to AFP. The last time prices exceeded $100 was at the start of the war in Ukraine, with the combination of rising gas prices creating a prolonged inflationary cycle. "There will be a substantial loss of 8 to 10 million barrels of crude," says Jorge Leon, head of geopolitical analysis and senior vice president at Rystad Energy. "The fact that Iran, one of the ten largest oil producers with 3.1 million barrels/day, is at the center of the tension causes concern. If oil infrastructure suffers damage from attacks, the consequences could be long-term." Shipping companies are redirecting vessels from the Persian Gulf and the Suez Canal. The detour via the Cape of Good Hope adds 10-15 days to cargo transport from Asia to Europe, increasing fuel consumption and costs for the global fleet. Insurance costs could increase by 50%, making operations in the Strait economically unviable.

Insurance updates

Insurance companies have already informed shipowners of contract cancellations and increases in insurance rates for vessels transiting the Persian Gulf and Hormuz. The suspension of war risk insurance from March 5, 2026, forces tankers to remain at anchor or seek alternative routes, increasing the price of consumer goods in import-dependent regions. The disruption of LNG supply from Qatar through Hormuz forces European energy companies to buy expensive alternatives on the US or African spot markets, increasing bills and the operating costs of heavy industries. In modern supply chains, aviation and shipping operate interdependently. If sea routes close, part of the cargo is moved by air. If the air also closes, shipping increases. If both fail, the full decomposition of chains begins: shortages, contract cancellations, production halts, and price hikes. Now aviation is also being hit.

The role of air transport

The closure of the airspace of the UAE and Qatar interrupts the most efficient air corridor globally. Over the last 20 years, Persian Gulf airports have evolved into global hubs, connecting Asia, Europe, and America. Airlines rely on the strategic geographic location, allowing the consolidation of long routes through hubs with modern fleets and infrastructure. But this strategy assumes the airspace will remain open and stable. "When the US, Israel, and Iran began exchanging missiles, the airspace closed not only over Iran, but also over Iraq, Syria, Qatar, Bahrain, and Kuwait, while extensive restrictions were imposed on Saudi Arabia, UAE, Jordan, and Israel. It wasn't just the closure of one or two corridors; it was the interruption of entire transport corridors between East and West," writes the British Arabic-language Al Majalla. Carriers are now forced into longer routes via Central Asia or Africa, increasing the transport cost of electronics and pharmaceuticals and disrupting "just-in-time" schedules.

The problem for central banks

Central banks worldwide are facing the problem of inflation from rising energy prices. High oil prices may lead to interest rate hikes and an overall economic "braking." International investors and foreign exchange markets are in high uncertainty due to the US-Israeli war against Iran. The threat is not simply the increase in the price of oil. The problem is that the strategic attack hits a critical geoeconomic hub. In the Middle East, the "risk price" and the "oil transport price" can become hundreds of times more important than the price per barrel. The Strait of Hormuz is not just a "bottleneck." It is the algorithm of the global economy: short routes, high flight frequency, reliable infrastructure. When the algorithm breaks, the global economy pays not in dollars per barrel, but in inflation and delays of weeks. Even a limited military campaign by the "Epstein alliance" against Iran can leave a deep and prolonged footprint: contract changes, new energy reserve strategies, insurance premium hikes, and markets in a state of extreme insecurity. If the US and Israel do not withdraw the "dogs of war" from the Iranian borders, the global economy will enter a period of prolonged instability, where energy security will determine national power and economic survival.

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