On Wednesday (July 15), the conflict in the Strait of Hormuz continued. Following the collapse of the US-Iran ceasefire agreement, military tensions escalated again, posing an unprecedented passage crisis for this vital waterway carrying approximately one-fifth of the world's oil shipments. The commodity market was hit hardest—the Dow Jones Commodity Index surged, and Brent crude oil prices broke through $87 per barrel for the first time in a month, currently trading above $85 per barrel, with a cumulative increase of over 12% this week. The global inflation outlook is being fundamentally rewritten by this geopolitical storm.

I. Cross-strait traffic has almost come to a standstill, and the shipping safety situation has deteriorated sharply.

According to maritime data company Kpler, only 11 ships passed through the Strait of Hormuz on July 12, marking the lowest single-day passage since June 14. This figure contrasts sharply with the previous daily average of over 130 ships. In the three days from July 10 to 12, a total of only 73 ships transited the strait, averaging less than 25 per day. On July 12, not a single ship entered the Persian Gulf, the first time since June 12. S&P Global Commodity Shipping data shows that from July 10 to 12, tankers, chemical tankers, liquefied petroleum gas (LPG) carriers, and liquefied natural gas (LNG) carriers accounted for 48% of the total passage. The number of tankers entering ports continues to shrink—from July 1 to 12, the average daily new crude oil and LPG tanker capacity entering the Persian Gulf through the Strait of Hormuz was approximately 6.5 million barrels, while from July 10 to 12, this had dropped to an average of 6 million barrels per day, a significant decrease from 8.5 million barrels in the first week of July. It is worth noting that Iranian-affiliated vessels and ships sanctioned by the United States accounted for nearly 60% of all traffic during the period from July 10 to 12. On July 15, a small number of vessels still risked passing through the strait, including a very large crude carrier (VLCC) carrying Iranian crude oil, a Suezmax tanker carrying Saudi crude oil, as well as two small product tankers and two bulk carriers.

II. Trump's "protection fee" plan reversed in a single day, exacerbating market volatility due to geopolitical shifts.

On July 13, US President Trump announced that the US would reinstate a naval blockade against Iran and impose a 20% fee on all goods transported through the Strait of Hormuz, declaring the US would become the "guardian of the Strait of Hormuz." However, under strong urging from Gulf allies, Trump reversed this plan on July 14, stating that he would instead pursue trade and investment agreements with Gulf states. This policy reversal fully exposed the Trump administration's predicament: escalating hostilities with Iran, coupled with Tehran's refusal to ease control over the Strait of Hormuz, are putting sustained upward pressure on oil prices. Ryan McKay, senior commodities strategist at TD Securities, stated, "Massive short covering by fund managers, coupled with potentially large-scale buying by commodity trading advisors, will only amplify the rally. We need to de-escalate the situation quickly, otherwise the energy market's reaction to a second wave of this war could be far more severe." Capital Economics analysts noted, "As long as the US blockade remains in place, the risk of Iran retaliating by disrupting other Gulf states' oil exports for an extended period increases. Crucially, the global oil market is now more vulnerable to further supply shocks than it was earlier this year."

III. Oil prices climbed for the third consecutive day, with Brent crude breaking through $85.

The oil market reacted swiftly to the deteriorating situation. On July 15, Brent crude futures prices climbed above $85 per barrel, currently trading at $85.88 per barrel, a daily increase of approximately 0.66%, and oil prices have risen by more than 12% this week. The previous trading day (July 14), Brent crude had already risen 2.5% to $85.30 per barrel, surging as much as 5% to $87.53 per barrel during the session, reflecting deep market concerns about tightening supply. Analysts at the Eurasia Group estimate that maritime traffic in the Strait of Hormuz may decline by 30% to 50% from pre-war levels, and oil prices could rise further to around $95 per barrel.

IV. Shipping giants urgently adjust prices, leading to a comprehensive increase in container freight rates.

Shipping companies are leading the way in translating geopolitical risks into actual pricing. Maersk announced a $1,000 increase in the emergency surcharge per container for cargo shipped from the Indian subcontinent to Northern Europe and the Mediterranean. The new surcharge, effective August 1, 2026, applies to cargo originating from Northwest India, Pakistan, Nepal, Southern and Eastern India, Sri Lanka, the Maldives, and Bangladesh. Following the increase, the emergency surcharge for 20-foot dry, 40-foot dry, and 40-foot refrigerated containers will rise to $3,500 per container for cargo from Northwest India and Pakistan to Northern Europe. For Bangladeshi exports to Northern Europe, the surcharge will be $4,000 for 20-foot containers, $4,800 for 40-foot dry containers, and $4,400 for 40-foot refrigerated containers. On the Mediterranean route, the surcharge from Northwest India and Pakistan will increase to $3,900 for 20-foot containers and $4,100 for 40-foot dry and refrigerated containers. Hapag-Lloyd announced adjustments to its peak season surcharges on the Nordic-US route, adding $500 per TEU for all dry, refrigerated, and special containers, effective August 10.

V. Inflation forecasts face reassessment, putting pressure on the ECB's policy path.

The broad-based rise in commodity prices is posing a substantial threat to central bank inflation forecasts. Commodity prices have risen by 24.3% over the past twelve months, with a 5.4% increase last month alone. The European Central Bank's latest forecast shows that, driven by rising energy prices, the average headline inflation rate is expected to rise to 3% in 2026, 2.3% in 2027, and only fall back to the 2% target level in 2028. The cumulative inflation rate is expected to rise to 3.4% in the third quarter of 2026 and remain high until early 2027. However, ECB officials have not yet observed a second round of inflationary effects, such as a rising wage-price spiral. The ECB previously raised its benchmark interest rate by 0.25 percentage points to 2.25%. The Eurozone's inflation rate in June fell more than expected to 2.8% from 3.2% in May, but the renewed deterioration of the situation in the Strait of Hormuz could reverse this cooling trend. The European Central Bank will hold its next monetary policy meeting on July 22-23. Some officials believe that interest rates may remain unchanged in July, but sources familiar with the matter indicate that a rate hike in July cannot be ruled out due to concerns about inflation triggered by the war with Iran. The Bank of Spain has raised its 2026 inflation forecast from 3% to 3.6% and its 2027 forecast to 2.6%, noting that the macroeconomic outlook still faces significant risks if the conflict continues. The expert panel of the Spanish analysis agency Funcas also raised its average inflation forecast for 2026 to 3.2% in July.

VI. Food prices have not fluctuated significantly yet, but risks are emerging.

The global food market has not yet experienced drastic fluctuations. The UN Food and Agriculture Organization's (FAO) food price index averaged 130.3 points in June 2026, a 0.3% decrease from May. The rise in vegetable oil and meat prices was offset by declines in sugar, cereals, and dairy prices. Compared to the same period last year, the index rose 1.7%, but remains 18.7% lower than the record high reached in March 2022. However, analysts warn that if the obstruction of the Strait of Hormuz persists for an extended period, the supply chains of commodities such as fertilizers and cereals will be impacted, potentially leading to a rise in food prices.

Editor's Summary

The Strait of Hormuz crisis has evolved from a geopolitical event into a systemic risk to the global economy. Daily traffic has plummeted from 130 vessels before the conflict to just 11; Brent crude oil has broken through $85 per barrel; and shipping surcharges have been increased by as much as $1,000 per container – these figures clearly illustrate the severity of the current situation. The European Central Bank's 3% inflation forecast and the Bank of Spain's 3.6% forecast have not fully factored in the latest variables of the deteriorating situation, and both face upward pressure for revision. While the one-day reversal of Trump's "protection fee" plan temporarily averted an additional surge in shipping costs, it also exposed the reality of the US's lack of effective control over the situation in the Strait. Global commodity prices have risen 24.3% in the past twelve months; if the Strait blockade continues, the second round of inflationary effects may change from "not yet observed" to "inevitable." Central banks around the world are at a crossroads in their monetary policy paths – whether to tolerate rising inflation or continue raising interest rates to suppress demand – a choice that will be made even more difficult by the gunfire in the Strait of Hormuz.

Frequently Asked Questions

Q: How important is the Strait of Hormuz to the global economy? A: The Strait of Hormuz is the world's most critical energy transport chokepoint. Before the conflict, about one-fifth of the world's crude oil and liquefied natural gas were transported through the strait, with more than 130 ships passing through daily. Any blockade or obstruction of this waterway directly impacts the global energy supply chain, consequently affecting the prices of almost all commodities. This is the fundamental reason why the global market remains highly tense even though the daily traffic has decreased to 11 ships. Q: What was Trump's 20% "protection fee" plan? Why was it canceled after only one day? A: On July 13, Trump announced that the United States would reinstate the naval blockade against Iran and impose a 20% fee on all goods transported through the Strait of Hormuz, declaring the United States as the "guardian of the Strait of Hormuz." However, Gulf allies (such as Saudi Arabia and the UAE) strongly opposed this, considering it close to "extortion." Under pressure from allies, Trump changed his tune the following day, stating that he would replace the fee plan with a trade and investment agreement. This back-and-forth highlights the dilemma the United States faces between controlling the Strait and maintaining its alliances. Q: What is the current price of Brent crude oil? How high might it rise in the future? A: As of July 15, 2026, Brent crude oil prices have reached $85 per barrel, a cumulative increase of over 12% this week. Analysts at the Eurasia Group estimate that if Strait traffic volume decreases by 30% to 50% compared to pre-war levels, oil prices could rise further to around $95 per barrel. Some analysts warn that if hostilities continue to escalate and damage energy infrastructure in the Gulf region, oil prices could even return to $100 per barrel. Q: What are the current interest rate and inflation forecasts from the European Central Bank? A: The European Central Bank has raised its benchmark interest rate to 2.25%. Its latest forecast shows that the average headline inflation rate is expected to be 3% in 2026, 2.3% in 2027, and fall back to 2% in 2028. The cumulative inflation rate is expected to rise to 3.4% in the third quarter of 2026. However, it should be noted that these forecasts were made before the situation in the Strait of Hormuz deteriorated again, and may be revised upwards later. The European Central Bank will hold a monetary policy meeting on July 22-23, at which time it will assess the impact of the latest situation on inflation. Q: Have food prices been affected by the Hormuz crisis? A: So far, global food prices have not experienced drastic fluctuations. The UN Food and Agriculture Organization's food price index for June 2026 was 130.3 points, a decrease of only 0.3% from May. This is mainly because the increase in vegetable oil and meat prices was offset by the decrease in sugar, grain and dairy product prices. However, analysts warn that if the Strait of Hormuz blockade continues, the supply chain of fertilizers, grains and other commodities will be affected, and food prices may subsequently rise. Although the FAO index rose by 1.7% year-on-year, it is still 18.7% lower than the historical peak in March 2022, leaving room for future price increases. At 15:21 Beijing time, Brent crude oil was trading at $85.75 per barrel.