Donald Trump’s call for NATO help in reopening the Strait of Hormuz has landed in a divided Europe, but markets aren’t waiting for a diplomatic tidy‑up. Brent crude has vaulted back above $100 a barrel and stayed volatile into Monday trading, a clear signal that energy costs are set to bite across the UK economy if the strait remains effectively closed. (axios.com)

The scale of the chokepoint explains the market’s reaction. In the first half of 2025, 20.9 million barrels per day of oil transited Hormuz - about a fifth of global consumption and a quarter of seaborne oil trade. Around one‑fifth of global LNG trade also moves through the passage. With those flows now severely constrained, replacement barrels and molecules are harder, slower and costlier to source. (eia.gov)

Insurance is now a cost shock in its own right. Major P&I clubs including Skuld and NorthStandard have cancelled war‑risk cover for Iranian and Gulf waters effective 5 March, while brokers report war‑risk premiums jumping from roughly 0.25% of a ship’s value to 1–1.5% - and far higher for the riskiest passages. That adds millions of dollars to a single tanker voyage, costs that feed straight through to delivered prices. (argusmedia.com)

Even where cover is available, many masters aren’t sailing. Tankers and gas carriers have been idling or clustering outside the Gulf as operators wait for clearer risk signals, with underwriters telling Lloyd’s List that safety concerns - not insurance capacity - are now the binding constraint. For UK buyers, every extra day at anchor means tighter prompt supply and wider delivery basis risk. (aljazeera.com)

Workarounds exist but won’t fully substitute. EIA estimates that Saudi Arabia’s East‑West ‘Petroline’ and the UAE’s Abu Dhabi pipeline together can bypass only about 4.7 million barrels per day - barely a quarter of normal Hormuz volumes. If the strait stays shut for weeks, global stock draws accelerate and longer‑haul reroutes entrench, keeping premia elevated. (eia.gov)

For the UK, the immediate exposure is refined products and aviation fuel. Government data show Britain imports much of its diesel via European hubs, especially the Netherlands and Belgium, while jet fuel is structurally import‑reliant. In 2025, the Persian Gulf supplied roughly 43% of Europe’s jet fuel imports, with the UK a top destination - a clear vulnerability if Gulf liftings remain blocked. (gov.uk)

Motorists will feel it next. The RAC warns that sustained $100 Brent risks pushing petrol towards 150p a litre and diesel higher still if wholesale pressures persist. Early‑March pump prices were already edging up; the usual lag between crude moves and forecourt boards suggests more to come unless the strait reopens quickly or strategic stocks are tapped at scale. (media.rac.co.uk)

Aviation and manufacturing face parallel pressures. Jet fuel prices have been climbing amid outages and precautionary curbs at key Gulf refineries, while European naphtha markets - a feedstock for plastics, packaging and solvents - are tightening as Middle East volumes falter. That raises input costs for UK airlines, chemicals and consumer‑goods producers even if end‑products load via non‑Gulf routes. (spglobal.com)

Less visible but material: base oils and lubricants. Europe’s reliance on premium Group III base oils from the Middle East rose to multi‑year highs last year. Disruption here filters into automotive and industrial maintenance budgets - the kind of slow‑burn expense SMEs notice at the next service cycle. (baseoilnews.com)

On the water, the maths is punishing. A 1% war‑risk premium on a $100m hull is a $1m line‑item before higher charter rates and fuel. OPIS and market notices indicate fresh Gulf war‑risk pricing rounds, while Lloyd’s of London stresses the market remains open. The price signal will cascade through freight invoices and CIF contracts to UK importers within weeks. (opis.com)

Policy moves are inching forward. The EU has extended Operation Aspides - its defensive naval mission covering the Red Sea and monitoring as far as Hormuz - but capitals remain wary of deeper military commitments. London, for its part, has pivoted mine‑countermeasures toward autonomous systems after withdrawing crewed minehunters from the Gulf, a safer approach but still relatively unproven at this operational tempo. (consilium.europa.eu)

What should UK boards do now? Finance leads should re‑price fuel and freight for Q2 using $100–$110 Brent sensitivities; procurement teams should check Incoterms and insurance clauses for war‑risk pass‑throughs; and operations should build a 2–3 week buffer for energy‑linked inputs. If Hormuz reopens quickly, the peak will fade. If it doesn’t, today’s premia risk becoming the new base case. (axios.com)