Hey,

Last week, Vincent Clerc — CEO of Maersk — told the BBC it plainly: the extra costs from the Hormuz crisis will be passed on to customers, and ultimately to consumers. His numbers: around $200 per standard 20-foot container, translating into a 15% to 20% increase in freight costs. As we covered last Sunday, roughly 90% of everything you buy moves by sea. Do the math.

But freight costs are just the beginning. What is unfolding in the Persian Gulf this week will reach European households, industries, and professionals through three distinct channels — each with its own timeline, its own mechanism, and its own level of severity. This post is about those three channels.

This is where Europe feels it first and hardest — and where the numbers are already alarming.

European natural gas futures jumped by around 30% following the initial strikes, with Dutch TTF — Europe's benchmark gas contract — reaching double its February 27 level within days. On the week, TTF prices were around 76% higher, with analysts warning that a monthlong halt to Hormuz flows risks driving European gas prices toward levels that triggered large demand responses during the 2022 energy crisis.

The structural reason Europe is particularly exposed: around 25% of Europe's total gas supply is LNG, and with roughly 20% of global LNG production sitting behind the Strait, a prolonged disruption could trigger a supply squeeze comparable to the 2022 shock following Russia's invasion of Ukraine. By early March 2026, EU gas storage facilities were only about 30% full — the lowest level since the 2022 energy crisis and roughly 30% below the five-year seasonal average. Germany hovered around 30%, the Netherlands had dropped to roughly 10%. These reserves are designed to buffer cold spells, not replace the constant flow of imported LNG required to keep industrial operations running.

The combined effect is the removal of approximately 5.8 million tonnes of Middle Eastern LNG supply in March alone — equivalent to roughly 14% of the original global monthly forecast. Gas prices across Europe and Asia have surged roughly 65% since the disruption began. Alternative suppliers cannot fill the gap at this scale or at this speed: the United States and Australia already operate at high utilisation rates, while Nigeria, Algeria, and Trinidad face feed gas constraints. Realistic supplementary supply from all alternative sources totals under 2 million tonnes against a 5.8 million tonne monthly shortfall.

Higher gas prices feed directly into electricity prices — and electricity prices feed into everything else.

The mechanism here is less immediate but no less real.

Maersk's $200 per TEU surcharge — and the 15–20% freight cost increase Clerc referenced — doesn't stop at the shipping company. It moves through the supply chain: importer absorbs part of it, distributor passes part of it on, retailer adjusts margins or raises prices. The consumer pays at the end of that chain. For low-margin goods — textiles, electronics, household products — the math is straightforward: higher landed costs mean higher shelf prices or thinner margins. Usually both.

Food deserves special attention, and it's the category most people aren't watching yet. Qatar's Ras Laffan complex doesn't just produce LNG — it also manufactures urea, polymers, and methanol. The shutdown simultaneously disrupts downstream industries that depend on those petrochemical outputs. Urea is a primary ingredient in fertilizer. The Qatari Energy Minister warned that if the war continues, other Gulf energy producers may be forced to halt exports and declare force majeure. If fertilizer shipments remain blocked through the spring planting season, food inflation in the second half of 2026 becomes a serious risk — not a hypothetical one.

Higher energy prices hit gas-intensive industrial sectors disproportionately hard: chemicals, glass, ceramics, aluminium. Europe's largest chemical companies rely heavily on natural gas — a sharp increase in gas prices cannot easily be absorbed. Companies must either pass higher costs down the supply chain or halt production entirely.

The steel industry faces similar challenges. Production requires large quantities of natural gas for heating and smelting. When gas prices surge, European steel becomes economically uncompetitive — and the effects on employment and industrial output follow quickly.

The automotive sector faces a compound hit: higher energy costs in manufacturing, disrupted supply of components from Asia, and longer transit times that break just-in-time production models built on predictable delivery windows. Economic models indicate that a 10% increase in gas prices raises eurozone inflation by about 0.6 percentage points within a year. With gas prices jumping over 65% in days, the inflationary impact will be severe — and the ECB faces an impossible choice: raise rates to fight inflation, risking a deeper industrial recession, or cut rates to support industry, risking a weaker euro and even higher import costs.

Before the tactics, the pattern. Crisis after crisis in this industry follows the same sequence: geopolitical shock → supply disruption → cost spike → inflation → demand slowdown → volume compression. The professionals who navigate it best are not the ones who react fastest to each notification. They are the ones who understand where they are in that sequence — and position accordingly.

Right now, we are between step two and step three. The cost spike is live. Inflation is incoming. Demand slowdown is not yet here — but it is priced in by analysts who are paying attention.

Three concrete actions worth taking this week:

Review your surcharge clauses. If your contracts don't have clear provisions for war risk surcharges, you are absorbing costs that should be shared. Check now, before the next invoice arrives.

Map your Hormuz exposure. Which of your cargo flows — either as origin or transit — pass through the Persian Gulf? The answer to that question determines your actual risk exposure, not the general market noise.

Communicate proactively with clients. The worst position in a crisis is being the person who explains it after the invoice arrives. Be the professional who calls first, explains the mechanism, and offers a timeline. That conversation builds more trust than any commercial pitch.

The next time someone in your life tells you that shipping is a niche industry that doesn't affect them — show them their gas bill. Show them the surcharge on their next delivery. Show them the fertilizer price chart.

A 34-kilometer-wide strait in the Persian Gulf is currently repricing energy across an entire continent, disrupting food supply chains, and forcing the ECB into decisions that will affect mortgage rates, employment, and industrial output across Europe. This is not a niche story. It is the story of how the world actually works — and why understanding maritime logistics is not optional for anyone operating in the global economy.

That's what Sunday Compass is here for. Every Sunday.

Talk soon,

Fer

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