The Strait of Hormuz, through which a fifth of the world's oil and gas transits, remains locked down by Iran. And Paris flatly refuses to pay to cross it. Economy Minister Roland Lescure was very clear on Thursday: "I don't want to pay a dollar to cross the Strait."
🔍 What's going on?
Iran has imposed de facto rights of passage through the Strait since the start of the regional conflict. This is blocking massive energy traffic and creating major geopolitical tension. Lescure, who was attending IMF and World Bank meetings in Washington, was adamant: a reopening of the Strait, yes, but "not at any price".
The G7 on Thursday called for "limiting the cost to the global economy" of prolonging the conflict. Emmanuel Macron and British Prime Minister Keir Starmer will chair a heads-of-state videoconference on Friday to consider "a multilateral and purely defensive mission" to Hormuz.
The G7 called on Thursday to "limit the cost to the global economy" of prolonging the conflict.
💡 Why does it matter?
For you who follow energy markets, this is the heart of the matter. A closed strait = soaring energy prices = accelerating inflation and slowing growth. Western governments know this and are openly worried. Indeed, Lescure has said that France is ready to release more strategic oil reserves if the conflict drags on.
.The "general feeling" among G7 finance ministers, according to Lescure, was that of a "serious situation". Not a bluff: it's the macroeconomic impact that's got governments talking.
📊 Our opinion
We're bearish on an economic escalation. Why? Because as long as Hormuz remains closed or under conditions, the risk premium on energy persists. This fuels inflation, complicates the life of central banks, and weighs on growth. France says "no to tolls", which is fine, but it solves nothing if the Strait remains blocked. And Pakistan is negotiating a second session between the United States and Iran after the first failed. We don't believe it yet. As long as we don't have a lasting solution, uncertainty will continue to weigh on inflation and yield curves.
✅ To remember
- Ormuz locked = 20% of world oil/gas blocked
- France refuses all tolls; G7 calls for damage limitation
- Inflation and growth are the real issues for markets
What do you think?Do you think a defensive mission to Hormuz can really reopen the Strait, or are we seeing more political posturing?
🔎 Also to be read
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