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Marine insurers have raised war risk premiums by up to 50 percent for vessels transiting the Gulf of Oman and the Strait of Hormuz, reacting within hours to escalating military strikes involving the United States, Israel, and Iran.
According to the Financial Times, insurers informed shipowners over the weekend that policies would be cancelled or repriced following U.S. and Israeli attacks on Iran and subsequent Iranian retaliatory strikes on American bases in the region. Brokers said additional war risk premiums could rise by as much as half in the coming days.
The unusual move to notify clients before trading resumed on Monday highlights the speed at which underwriters are recalibrating exposure in one of the world’s most critical energy corridors. For shipowners, charterers, and cargo interests, the increases translate directly into higher voyage costs and renewed operational uncertainty.
War Risk Premiums Climb Sharply
Until recently, the additional war risk premium for a single transit through the Gulf stood at about 0.25 percent of a vessel’s insured value. For a tanker valued at $100 million, that equated to roughly $250,000 per voyage.
Insurance broker Marsh McLennan told the Financial Times that a 50 percent increase would lift the premium to around $375,000 per voyage for the same vessel. Market participants said further upward adjustments remain possible if security conditions deteriorate.
War risk cover is typically priced per voyage and can be revised quickly in response to military developments. The latest increases reflect underwriters’ concerns over potential missile strikes, drone attacks, or naval incidents affecting commercial shipping.
For operators running multiple voyages per month, particularly in the crude, refined products, and LNG trades, the added insurance burden may begin to influence freight negotiations and charter party terms.
Strait of Hormuz in Focus
The Strait of Hormuz is a strategic chokepoint for global energy flows, with a significant share of the world’s oil and liquefied natural gas exports passing through the narrow waterway between Oman and Iran each day.
Insurers are assessing not only the risk of direct state action but also the possibility that allied groups, including Houthi forces in Yemen, could target commercial vessels. Previous regional incidents have led to temporary premium spikes and route adjustments.
Maritime security advisers said shipowners are closely monitoring naval advisories and intelligence updates. Some are reviewing contingency plans that include rerouting via the Cape of Good Hope, which adds considerable time and fuel costs, or delaying cargo liftings until risk levels stabilize.
Broader Market Implications
The latest premium increases come amid a broader pattern of faster insurance market responses to geopolitical flashpoints near strategic sea lanes.
Higher war risk costs can cascade through the supply chain. Charterers may seek to pass additional insurance expenses on to cargo interests, while energy buyers could face higher delivered costs if freight rates adjust upward.
In extreme scenarios, any disruption or temporary closure of the Strait of Hormuz would have far-reaching consequences for tanker availability, LNG schedules, and global energy pricing. For now, vessels continue to transit the region, but market participants said the insurance market’s swift reaction signals that risk tolerance has narrowed significantly.
