DIRE STRAITS OF HORMUZ: Navigating Force Majeure, gas price reviews and other legal rights in times of conflict and uncertainty

Dire Straits of Hormuz: Navigating Force Majeure, gas price reviews and other legal rights in times of conflict and uncertainty.

The Strait of Hormuz, a critical chokepoint for global energy supply, has once again become a focal point of geopolitical tension. Recent attacks on oil & gas production facilities and shipping have raised complex legal issues for energy companies, shippers, insurers, investors and others operating in, or dependent on supplies from, the Middle East. While force majeure clauses are often the first line of defense in contracts disrupted by such events, the legal landscape is far broader, touching on contract law, LNG and gas price reviews, maritime obligations, insurance, and possibly investment treaty protections.

Hopes have been raised in recent days that the conflict will soon end, with negotiations reportedly underway between the warring states. Nonetheless, there is considerable uncertainty as to when performance under affected contracts will resume and to what extent. This LFM Insight explores the key legal challenges arising from the current turmoil in the Strait of Hormuz and offers practical insights for navigating these complex issues.