The insurance market repriced Hormuz risk within a day of this week's tanker attacks. War-risk cover for vessels transiting the Gulf rose from around 2% of hull value at the end of last week to 3% inside twenty-four hours, with underwriting sources saying rates could reach 5% or more — "Someone will cover you, but probably at 5% at the least" (Insurance Journal).
The mechanics matter for anyone modelling Gulf exposure. War-risk cover is written on a seven-day basis and reviewed every twenty-four to forty-eight hours, so premiums move fast and each small rise adds hundreds of thousands of dollars a day to a large tanker's transit cost. Some war underwriters have gone further and advised shipping companies to pause Hormuz voyages while they reassess, though no blanket withdrawal of cover has occurred (Insurance Journal). The UN's International Maritime Organization recommended avoiding Hormuz sailings until crew safety can be assured, with Secretary-General Arsenio Dominguez flagging the strain rising insurance costs put on shipowners (Insurance Journal). Oil prices jumped about 5% on the news.
Washington's $40bn reinsurance backstop for Hormuz shipping remains in the background rather than the foreground: it only covers escorted transits, of which there have been effectively none, so it is not the mechanism setting the price (Insurance Business, via earlier reporting). The live gate on the strait reopening is the commercial war-risk market — and this week it moved the wrong way.
For security firms, the read-across is demand, not shipping economics. Repriced and paused maritime cover pushes clients toward air and overland alternatives, raises the value of route-risk advice, and keeps Gulf-facing corporate travel and asset-protection budgets elevated. Rates in the region hold firm while the war-risk market stays inverted.
