European countries and Japan announced on Thursday (March 19) their joint efforts to ensure the safety of navigation in the Hormuz Strait and help stabilize the energy markets.
In a joint statement, the UK, France, Germany, Italy, the Netherlands, and Japan condemned Iran’s attacks on commercial ships and civilian energy infrastructure and its actions effectively closing the Hormuz Strait.
They called on Iran to “immediately stop” its threats to shipping, cease laying mines, and stop launching drone and missile attacks.
These countries emphasized that freedom of navigation is a fundamental principle of international law. They warned that disruptions in energy supply would pose a threat to global security.
The statement read: “We are willing to make appropriate efforts to ensure the safety of navigation in the Hormuz Strait. We welcome the commitments made by countries involved in planning for this endeavor.”
The statement welcomed the release of strategic oil reserves by various countries, adding: “We will take additional measures to stabilize energy markets, including cooperation with some oil-producing countries to increase output.”
On Thursday morning at 8:00 AM Eastern Time, European natural gas prices rose by 25%, Brent crude oil futures surged nearly 6% to $113 per barrel, a spike of about 10%. Since the outbreak of the war on February 28, European natural gas prices have risen by over 60%.
Stock markets in Japan and South Korea fell by about 3%, the pan-European index dropped by 2.5%, nearing the lowest levels in over three months. Wall Street is expected to open lower.
Since the beginning of the war in early March, most shipping activities in the Hormuz Strait have ceased. The Hormuz Strait supplies approximately one-fifth of the world’s crude oil. Around twenty ships in the region have been attacked.
According to data from the Lloyd’s Intelligence Company cited by the Associated Press, between March 1 and 15, at least 89 vessels passed through the Hormuz Strait, including 16 oil tankers. The report stated that prior to the war, the daily passage of ships was around 100 to 135, whereas after the war, among the 89 vessels, over one-fifth were believed to be related to Iran, with the rest linked to China and Greece.
Due to the impact of the U.S.-Iran war, the daily oil exports in the Middle East region, including major oil-producing countries like Saudi Arabia, have dropped by at least 60% this week.
According to Kpler data, as of the week ending March 15, the average daily crude oil, condensate, and petroleum product exports of eight Middle Eastern countries including Saudi Arabia, Kuwait, Iran, Iraq, Oman, Qatar, Bahrain, and the UAE stood at 9.71 million barrels per day, a 61% decrease from February’s 25.13 million barrels per day.
Kpler analyst Johannes Rauball stated, “This week, the offshore storage of Middle East crude oil has exceeded 50 million barrels, surpassing the pre-war level of about 10 million barrels.”