France and Italy Initiate Diplomatic Efforts with Tehran to Secure Strait of Hormuz

France and Italy have initiated preliminary discussions with Tehran to ensure the safe passage of vessels through the Strait of Hormuz.

European officials are looking for ways to resume energy shipments from the Persian Gulf as regional tensions continue to impact global markets, according to The Financial Times on March 13.

Shipping through the narrow waterway, which usually handles about one-fifth of the world’s oil and liquefied natural gas, has dropped significantly. This follows several attacks on tankers and a pledge from Iran’s new supreme leader to keep the passage closed.

Three officials familiar with the matter told the Financial Times that European capitals are attempting to restore oil and gas exports while avoiding a wider escalation. Shipping companies have reportedly requested that Western naval forces provide potential escorts for their tankers.

France and Italy are among the nations participating in these efforts. However, officials emphasized there is no guarantee that the talks will progress or that Iran is willing to negotiate.

Some analysts believe Tehran is attempting to drive up energy prices to pressure the US administration. On Thursday, Mojtaba Khamenei, Iran's new supreme leader, vowed to continue the blockade.

European governments remain concerned that a prolonged closure of the strait will cause energy costs for businesses and households to rise. This would add further pressure to national budgets and the continent’s economy.

Oil prices have already climbed to approximately $100 per barrel, up from $60 at the start of the year, while European natural gas prices have risen by 75 percent in the same period.

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While Italy, France, and Greece have warships in the Red Sea as part of a maritime mission, officials stated that European navies are not yet prepared to escort ships through the Strait of Hormuz if there is a high risk of attack. One official noted that "It has to be a permissive environment."

There is also internal disagreement within Europe regarding these diplomatic efforts. One official mentioned that some member states believe talking to Tehran is necessary, while others strongly oppose the idea.

The United Kingdom is not engaging in direct negotiations with Iran regarding the strait. Instead, British Foreign Secretary Yvette Cooper is visiting Saudi Arabia to discuss the continuity of oil supplies with Gulf nations.

The global oil market experienced significant volatility as Brent crude futures surpassed the $100 mark. After reaching $119 per barrel earlier in the week and dropping to $81 on Tuesday, prices returned to triple digits by Thursday following reports of maritime instability.

Brent contracts for April delivery rose to $101.5 per barrel before stabilizing near $96.48, while West Texas Intermediate (WTI) saw an increase of 4.46%, trading at $91.21 per barrel.

Analysts from ING noted that there were no signs of de-escalation in the Persian Gulf at that time, as disruptions to oil transportation through the Strait of Hormuz were expected to persist.

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