Strait of Hormuz War-Risk Premiums Jump After Attacks on Vessels

Marine war-risk insurance premiums for ships passing through the Strait of Hormuz have surged to around 5% of a vessel's insured value following attacks on three commercial vessels, a sharp escalation that underscores the growing peril to one of the world's most vital energy shipping routes. The rise in hull war-risk rates, quoted per voyage, means the cost of insuring a large tanker or cargo ship against conflict-related damage can run into millions of dollars for a single transit. The United Nations' maritime body has advised ships to avoid the waterway, through which a substantial share of global seaborne oil and liquefied natural gas passes, after the number of vessels transiting fell sharply amid renewed US-Iran hostilities. Insurers and reinsurers reprice war-risk cover rapidly in response to attacks, and some underwriters have grown reluctant to write business for the route at any price, tightening capacity. Higher insurance and rerouting costs feed through to freight rates and, ultimately, energy prices, adding to inflationary pressure globally. The situation illustrates how geopolitical conflict transmits directly into insurance markets and the real economy, with premiums serving as a real-time gauge of perceived risk in the region.