War risk insurance costs for ships using the Strait of Hormuz have risen sharply since Iran said it had closed the waterway following US and Israeli strikes, according to Reuters, Al Jazeera and other outlets.
Premiums for insuring ships in the Strait of Hormuz have climbed from 1–3 percent of hull value to 7.5–10 percent, Al Jazeera reported in July, citing S&P Global. Al Jazeera's standfirst said the rates were four times the five-year average.
The increase follows a series of steps by insurers and by Iran since the war began. Reuters and the Irregular Warfare publication date its start to US-Israeli strikes on Iran on 28 February 2026.
In early March, Reuters reported that insurers were cancelling war risk cover for vessels in the Gulf as the conflict disrupted shipping. It said Iran had retaliated against the US and Israeli strikes and had said it had closed navigation through the waterway.
Reuters, in a report carried by NewsNation, said about 150 ships were stranded, at least four tankers had been damaged and at least two people had died. Iran said it had hit five tankers. The number of tankers hit comes from Iran, while Reuters separately cited damage and fires.
Al Jazeera reported on 3 March that insurers cancelled cover after the Islamic Revolutionary Guard Corps (IRGC) said the strait was closed. The Financial Times, as reported by Ship & Bunker, said war risk insurers had submitted cancellation notices for Hormuz policies.
Reuters said the strait carries around one-fifth of the oil consumed globally, along with large quantities of gas. That is why changes in cover and access are closely watched by energy markets.
By late April, Al Jazeera reported that about 2,000 ships remained stranded in the Gulf. Shipping insurers who spoke to the outlet said premiums stood at up to 5 percent of hull value, against 0.25 percent before the war.
The same report said the US had stated that mine clearance would take about six months. Al Jazeera also reported that Tehran had at one point let ships from friendly or toll-paying countries pass, mostly from India, Pakistan, Turkey and China, but that this was later closed to all foreign ships.
In July, The National reported that Iran had resumed attacks on tankers using routes through Omani waters and that the US had responded with strikes. It said Iran announced the waterway had again been closed.
The National also reported Iranian missile strikes on two UAE-linked Adnoc tankers, in which one sailor was killed. The brief did not include any response from Washington or Tehran to the latest events, and none had been reported in the material reviewed.
The National carried a statement from the International Union of Marine Insurance saying: "Marine insurance is part of the solution, not part of the problem".
Iran has also moved into the insurance market itself. Lloyd's List reported that Iran's Persian Gulf Strait Authority is imposing mandatory Iran-approved insurance, free for 60 days. It said it based the report on a terms-and-conditions document it had seen.
According to Lloyd's List, the document says the cover is provided free of charge to the vessel owner, with all expenses covered by the Islamic Republic of Iran. Lloyd's List described the rule as sidestepping a US-Iran memorandum guaranteeing toll-free passage.
Separately, Insurance Journal, citing the semi-official Fars news agency, reported a Bitcoin-backed scheme called Hormuz Safe. The claim comes from Fars alone and has not been independently confirmed.
Al Jazeera, in its July report, said the IRGC had declared the strait completely closed and under Iranian control. The same report said the IRGC claimed three ships were acting on US orders. No US response to that claim was seen.
Al Jazeera also reported that the Houthis had announced a blockade at Bab al-Mandeb and that the US had imposed a naval blockade on Iran-linked ships. Munro Anderson of Vessel Protect told the outlet that the market faced a de facto closure of the strait based mainly on perception of threat.
Some analysts have argued that insurance withdrawal closed the strait before any physical blockade. Those views are analysis rather than reported fact, and this article does not rely on them.
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