Submitted by Thomas Kolbe
War is raging in Iran. Amid the fog of propaganda, it is increasingly difficult to separate fact from fiction, to distinguish AI-generated material from actual bomb strikes, and to see behind the carefully woven veil of media spin and national interests. Yet, we attempt here to make sense of the latest moves on the geopolitical chessboard.
One immediate consequence of the Strait of Hormuz blockade is a fatal ripple effect in the energy sector. Companies such as QatarEnergy are forced to reduce gas and oil production. Refineries are shutting down, and tankers can no longer transport output. The physical logistics of the energy market are faltering – with consequences far beyond the region.
Markets are responding nervously. Both spot and futures prices continue to climb. At the close of New York trading, WTI crude stood at around $93 per barrel, nearly a twenty percent increase since the U.S.-Israeli intervention against Iran’s Ayatollah regime.
From a European perspective, the implications are clear. The highly energy-dependent continent is increasingly politically adrift. For many governments, a lot is at stake if prices are not swiftly brought under control. Rising energy costs, growing production expenses, and mounting burdens on households and businesses threaten a new economic stress test for Europe.
For a week, Brussels has been in frenetic motion. Ursula von der Leyen’s European Commission stages media-friendly exercises that amount to little more than political shadowboxing: attempting to solve a shortage problem that cannot be eliminated through domestic production. Member states are currently discussing joint purchasing consortia and familiar tools such as subsidies and cost offsets for energy-intensive industries – the usual toolkit, deployed repeatedly in the past. In other words, much of it boils down to massive debt accumulation intended to temporarily alleviate the effects of the Hormuz blockade.
Looking to Germany, one sees how vulnerable Europe’s energy architecture remains. The rapid decline of gas storage levels underscores the importance of a robust strategic reserve.
In this context, the European decision to mandate a strategic oil reserve equivalent to at least ninety days of average consumption was farsighted. The timing and scale of reserve deployment remain uncertain.
A note on the disproportionately high gasoline prices in Germany: this is precisely the effect when a high-taxing fiscal state claims roughly 65 percent of the retail price. In an energy crisis, this structure paradoxically makes the state a short-term beneficiary of rising prices.
The Europeans’ inability to act was epitomized by German Environment Minister Carsten Schneider of the not-so-social Social Democrats. Faced with rising fuel costs, he bluntly recommended that Germans switch to electric cars. This cynical stance – coming from the security of a well-padded, subsidized political bubble – makes the attitude so unbearable. Those who drive the country economically – millions of commuters dependent on cars for their livelihood – are dismissed entirely.
Naturally, the expansion of renewable energy and the continued commitment to the green transition remain central points on the EU agenda. They simply cannot escape their closed, ideologically narrow argumentative framework.
Other options remain politically taboo. The exploration of domestic gas reserves in Europe or the long-term maintenance of coal-fired power – even in Germany – is still not seriously considered. The pressure on political decision-makers has evidently not yet reached a level sufficient to return to a pragmatic, rational energy policy.
From the U.S. perspective, the Hormuz blockade and the planned political power shift in Tehran fit into a larger strategic concept. Control over oil and gas flows from Venezuela, combined with the U.S.’s record domestic production, could create a significant problem for China, which is existentially dependent on imports from these regions.
Should the U.S. achieve its political objectives in Tehran, a massive shift of power would tilt in its favor. Together with the oil states more closely bound to its power structure, it could dominate the global energy market and substantially strengthen its position relative to Beijing.
This is of critical significance for future negotiations with China. It concerns not only energy but also access to rare earths, curbing Chinese influence in the Western Hemisphere, and the so-called fentanyl war, where the last word has certainly not yet been spoken.
Another observation is worth noting. In this reorganizing geopolitical power constellation, which is largely determined by access to energy and strategic resources, Europe has largely lost its strategic agency. Between the U.S., Russia, and China, it barely emerges as an independent actor.
Europe has thus accomplished a remarkable feat: politically caught between all stools – and now standing as a dependent price-taker in energy markets, with its back to the wall.
The Strait of Hormuz crisis has also shaken a previously overlooked market: maritime insurance. Following Tehran’s threat to close the strait, several tanker attacks occurred off the coast. Insurance premiums soared, and major providers – a market dominated by the City of London – immediately withdrew. Risks were too high, and coverage in the event of a claim could no longer be guaranteed.
This was the decisive moment: U.S. President Donald Trump announced that the U.S. Development Finance Corporation (DFC) would step into the gap. State-backed war and political risk coverage at “very reasonable” prices, as he put it, would provide relief. This creates a government-supported competitor to Lloyd’s. The U.S. is not only supplying insurance capacity but combining it politically with U.S. naval escorts – gunboats.
For the now virtually invisible British Empire in financial and insurance markets, this – following massive attacks on the London-based LBMA precious metals markets – would be the next pillar of its power structure to wobble, a framework previously sustained mainly through international trade.
In short: the next geopolitical lever for the U.S. comes into view, should it capture a significant portion of this insurance business. Whoever controls the underwriting lever – who decides which risks are covered and which tankers receive a policy – wields a massive sanctioning instrument. Insurance has thus become a geostrategic tool, with Europe left on the sidelines.
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About the author: Thomas Kolbe, a German graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.