What the Strait of Hormuz Vote Means for UK Businesses

On 22 June, Iran’s parliament passed a bill to close the Strait of Hormuz, a major global shipping route for oil and gas. While the vote carries weight, it’s not a done deal. Final approval still rests with Iran’s Supreme National Security Council.

Markets reacted swiftly, with oil and gas prices jumping before easing slightly. While the UK doesn’t import directly from the region, we’re still exposed. Global price shifts flow through to European energy hubs, and from there, into UK commercial energy costs.

Why the Strait Matters

Roughly 20% of the world’s oil and a third of LNG moves through the Strait of Hormuz. Even the threat of disruption creates uncertainty, which tends to drive prices up.

Although the UK’s physical supply is unaffected, we’re financially tied to:

• Gas prices set by European benchmarks
• Oil-indexed contracts
• Cost pressures across logistics, manufacturing, and transport

Markets React, and Politics Play a Role

Following the vote, Brent crude briefly spiked near $80 before settling in the $76–77 range. Citi analysts noted that if Iranian exports alone are affected, prices could hold steady. But a full closure? That could see oil jump to $120 or more.

Gas prices followed suit. European TTF futures rose by 5–7%, which directly affects UK wholesale gas prices, and, by extension, electricity costs.

The Latest: Missile Strikes and Market Movement

On 23 June, Iran launched six missiles at a U.S. military base in Qatar. No serious damage was reported. Oil prices actually fell in response, as traders viewed the strike as symbolic rather than escalatory. Brent dropped over 7%, settling closer to $70.

The market’s calm is also likely influenced by political pressure. U.S. President Donald Trump has urged oil-producing nations to avoid price spikes ahead of the U.S. election. That sentiment, combined with a lack of immediate supply disruption, appears to be keeping a lid on prices, for now.

China’s Influence

China, Iran’s biggest oil customer, is also a key player in this story. Its imports from Iran have already dropped significantly, and it has openly called for stability in the region. With strong diplomatic and economic leverage, China’s stance could be instrumental in preventing further escalation.

What This Means for UK Energy Costs

Here’s how the situation may affect your energy bill:

• New fixed quotes are already factoring in the added risk.
• Flexible and pass-through contracts could see rises in the coming weeks.
• A 5–7% rise in wholesale gas could add £5–£10/MWh to electricity costs.
• Oil price movements will filter through to fuel and supply chain costs.

What Comes Next?

Several outcomes are still on the table:

Full Closure – Unlikely, but would drive sharp price rises and prompt a global response.
Targeted Disruption – Increased inspections or delays. Prices likely to rise steadily.
Symbolic Measures – No actual enforcement, but risk premium remains.
Diplomatic Cooling – Pressure from China and others may ease tensions. Prices could settle but stay volatile.

What Businesses Can Do Now

Check your renewal date – If you’re renewing in the next six months, review your options now.
Watch the market – Benchmarks like Brent and TTF are good early indicators.
Cut unnecessary usage – Tools like Energy Metrics help reduce out-of-hours waste.
Be ready to move – Quick sign-off from decision-makers can secure better rates.

The Strait of Hormuz situation is already influencing UK energy costs, and could shape the market over the weeks ahead.
Even if disruption doesn’t materialise, the risk alone is enough to keep prices unstable. Now is the time to assess your position.

At Tritility, we’re here to help you navigate these changes with clarity and confidence, get in touch today and we’ll be happy to advise you.

Sources:
WSJ – Why the Strait of Hormuz Matters
NY Post – Iran Vote Reaction
The Times – Oil Price Dip
Reuters – Citi Forecast
Financial Times – China Crude Imports
Guardian – Middle East Economy Warning
BBC – Iran Missile Strike Report
Gov.uk – UK Electricity Mix