Marine Insurance Collapsed at Hormuz: Ships Refusing Transit Even When Iran Says It's Open

# Marine Insurance Collapsed at Hormuz: Ships Refusing Transit Even When Iran Says It's Open

> **Quick answer:** War risk premiums for Strait of Hormuz transit surged from 0.2% to as high as 10% of hull value for US-nexus vessels in March 2026. Lloyd's Joint War Committee redesignated the entire Arabian Gulf a conflict zone; P&I clubs covering 90% of the global fleet issued 72-hour cancellation notices. Even after the US government launched a $40 billion reinsurance backstop, there are zero confirmed takers — and ships are still refusing to transit even when Iran declares the passage open.

Marine insurance has effectively ended Hormuz transits that no military force has managed to stop. Since late February 2026, tanker traffic through the world's most critical oil chokepoint has collapsed by as much as 90% — not because Iran physically blocked the Strait, but because the commercial logic of global shipping insurance made transiting economically and legally untenable. The story of how the insurance market shut Hormuz before the admirals could is unlike any supply disruption in modern history.

## The Premium Shock That Stopped the Ships

The escalation was swift and mathematical. Before U.S.-Israeli airstrikes on Iran in late February 2026, war risk premiums for Hormuz transit ran between 0.15% and 0.25% of vessel hull value — routine, negligible, the kind of line item buried in a voyage's operating costs.

Within 48 hours of the first strikes, premiums jumped fivefold. By the first week of March, the Lloyd's List benchmark showed rates for standard tankers at 0.8–1.5% of hull value. For vessels with US, UK, or Israeli commercial ties — what brokers were openly calling "missile magnets" — premiums reached 5–10% or higher, with market sources reporting some quotes arriving at 7.5% and climbing toward 10% as a floor.