Maritime traffic through the Strait of Hormuz is generating record costs for the global shipping industry, in a context of skyrocketing fuel prices due to the ongoing conflict in the Middle East. According to analysts from Transport & Environment (T&E), based in Brussels, shipping companies are facing an additional cost of 340 million euros daily in fuel expenditure since the onset of hostilities in the region.
The very low sulfur fuel oil (VLSFO) in Singapore has climbed to 941 euros per ton, reflecting an increase of over 220% since the beginning of the year, while liquefied natural gas (LNG) prices have risen by 72% since early March.
This increase occurs at a time when Malaysia has obtained authorization for its vessels to transit through the strait, a development initially reported by agency sources and later picked up by The Guardian in London. Malaysian Prime Minister Anwar Ibrahim stated that he had held discussions with the leaders of Iran, Egypt, Turkey, and other countries in the region, and that Malaysian vessels were being authorized to pass.
Anwar Ibrahim thanked Iranian President Masoud Pezeshkian for allowing Malaysian vessels to pass and indicated that the tankers and their crews were being released to continue their journey. Although Malaysia is an oil-producing country, approximately half of its supply usually transits through the Strait of Hormuz, making uninterrupted access a critical issue for the country. Diplomatic coordination has already allowed the transit of a limited number of Thai and Chinese vessels, and some ships have paid tolls to Iranian authorities, highlighting the highly selective nature of the existing passage agreements.
The United Kingdom has offered to host an international security summit for the reopening of the strait, underscoring the economic relevance of this trade route. Defense and maritime sector officials have indicated that around 20% of the world's oil typically transits through Hormuz, meaning any interruption quickly translates into widespread cost pressures for shipping companies. The limited number of authorized transits so far illustrates both the logistical and financial risks that persist as the conflict continues in the region.
According to T&E's calculations, the shipping industry has already accumulated more than 4.6 billion euros in additional fuel costs since the conflict began. Most of the global fleet operates on fossil fuels, leaving companies highly exposed to price volatility and supply disruptions. Marine fuels such as VLSFO and LNG have become so expensive that the price difference with cleaner alternatives, including e-fuels, has been reduced, with some ports already seeing prices below 5% of fossil fuel costs.
Eloi Nordé, head of maritime transport policy at T&E, stated that the crisis demonstrates the vulnerability of a shipping sector dependent on fossil fuels to geopolitical disruptions. "The chaos in the Strait of Hormuz is putting global maritime trade in the spotlight," Nordé declared, adding that the war is costing the industry millions every day, a figure that far exceeds the projected additional cost of green fuels and energy efficiency measures. The T&E official advocated for investment in European e-fuels and energy efficiency technologies to mitigate future disruptions.
T&E points out opportunities to reduce dependence on fossil fuels, particularly in short-distance cargo ships and ferries susceptible to electrification. Modern assisted wind propulsion technologies and reduced-speed navigation on ocean-going vessels could cut fuel consumption by up to 18%, according to the analysis. Large-scale development of domestic e-fuel production in Europe would also help shipping companies protect themselves against international price fluctuations and improve energy security.
The combination of rising fuel costs and selective access for vessels through Hormuz is transforming the economics of maritime trade. Operators face both immediate cost pressures and long-term strategic decisions regarding energy transition, investment in efficiency, and route flexibility.