Washington and London are moving to convene a high-level international conference aimed at assembling a coalition to protect commercial shipping and clear naval mines from the Strait of Hormuz, according to European diplomats and officials briefed on the planning — a diplomatic push driven less by battlefield calculation than by the mounting cost of a closed waterway to global trade.The meeting is being organized for London, with the itinerary and date still under discussion. It would potentially bring together defense ministers and senior military commanders from Western nations and from countries in the region, with Pete Hegseth and Chairman of the Joint Chiefs Gen. Dan Caine among the potential attendees. A White House official confirmed that the United States and the United Kingdom want to hold the conference within the week. Hegseth serves as Secretary of War.

The economics behind the urgency are stark. The strait normally carries roughly a fifth of the world’s seaborne oil and liquefied natural gas, and the collapse in traffic since the February 28 outbreak of hostilities has repriced risk across the entire maritime supply chain.

Insurance has become the binding constraint

War-risk insurance is now the single largest obstacle to restoring commercial flow. Additional war-risk premiums in the area have climbed from a range of 1 to 3 percent of hull value several weeks ago to between 7.5 and 10 percent, according to Marcus Baker, global head of marine, cargo and logistics at the brokerage Marsh, who spoke to Platts on July 22. Baker warned that if attacks continue, the market may sharply pull back its willingness to write coverage at all, though the sector still holds substantial capacity, with worldwide hull coverage estimated in the billions.

The arithmetic is brutal for operators. A $100 million tanker now faces a war-risk premium of between $3 million and $10 million per voyage, against roughly $250,000 before the war, when the rate stood near 0.25 percent of hull value. Those costs do not stay with shipowners; they pass to charterers through freight rates and ultimately into the delivered price of crude, feeding fuel and food inflation in importing economies.

Traffic data tells the same story. There were 10 transits through the Strait of Hormuz on July 21, down from 16 the day before, according to S&P Global Commodities at Sea — a fraction of the more than 130 daily transits the waterway once handled. The United Nations International Maritime Organization documented eight vessels struck between July 13 and July 20. The result is a two-tier market, with cautious operators idling outside the strait while others run fast shuttle transits.

Mines, not diplomacy, are the technical problem

Any escort operation depends first on clearing the channel. Reporting on the conference planning indicates the central shipping lane must be swept of more than 80 naval mines laid since February before commercial convoys can move safely, and that Pentagon estimates put full clearance using three dedicated minesweepers at as long as six months — a timeline that autonomous mine-hunting systems are meant to compress.

That capability gap is precisely what the coalition is designed to fill. NATO Secretary General Mark Rutte has said the U.S. military, for all its strength, lacks mine-clearance assets, which Britain and its European allies can supply. Rutte described a British- and French-led coalition of more than 40 countries with relevant capabilities, particularly in demining, backed by G7 leaders and built around deployment of autonomous mine-hunting equipment.

Washington now wants allies to commit hard assets — demining vessels, naval ships and drones — to secure the lanes, building on discussions the U.K. and France have held with multiple governments in recent months. A condition many of those governments have set is that fighting in the strait stop first, so conditions are safe enough for an international maritime mission to operate.

What reopening would mean

For importers, shippers and energy-dependent manufacturers, the conference is the clearest signal yet that a structured commercial reopening is being organized rather than left to chance. Restoring the strait to commercial shipping is treated as a central element of the American exit strategy from the conflict and of efforts to steady global energy markets.

Whether the London meeting produces committed vessels or another framework document will determine how quickly premiums retreat. Underwriters price observed behavior, not communiqués: rates will fall when transits rise and losses stop, not when ministers pose for a photograph. Until then, the cost of moving a barrel of Gulf crude to Asia carries a war premium measured in millions per voyage — a tax paid, eventually, at every fuel pump and grocery shelf downstream.

JBizNews Desk | New York

© JBizNews.com All Rights Reserved. Reproduction or distribution without written permission is prohibited.