The economic gate on the Strait of Hormuz has not lifted, and this week's funeral-driven diplomacy is what might eventually move it. Underneath that diplomacy sits a market still pricing the strait as a war zone.
War-risk insurance for a Hormuz transit has been running at around 4% of a ship's value for a seven-day policy, against a pre-crisis norm nearer 0.001% — a roughly four-thousand-fold jump (The National). For scale, 4% of a 100-million-dollar hull works out at about 4 million dollars for a single seven-day transit, against a pre-crisis figure nearer a thousand. Traffic has stayed well below pre-war levels (The National).
Washington's answer has not landed. In April the US International Development Finance Corporation doubled its maritime reinsurance facility to 40 billion dollars, bringing in Chubb, Travelers, Liberty Mutual, Berkshire Hathaway, AIG, Starr and CNA (Insurance Journal). But it was built as one part of a US-run naval-convoy system — cover is available only to vessels transiting under US escort — and that convoy programme never materialised. On the latest reporting the facility had written no business: not a dollar of cover placed (Insurance Business). A 40-billion-dollar backstop no shipowner can actually use does not move the premium they pay.
For anyone with maritime exposure — protective details on yachts and commercial vessels, crews, cargo owners, duty-of-care managers — the read is that the strait's cost and risk are still set by the private war-risk market, not by the government facility. Premiums will ease only when the underlying threat eases, and that hinges on the diplomacy now paused for Iran's mourning week. Plan and price on crisis-rate assumptions until the market itself signals otherwise.
