Marine insurance rates have spiked across Middle Eastern conflict zones following the sharp escalation of hostilities between Iran and Israel, including U.S. airstrikes on key Iranian nuclear facilities. The growing volatility has triggered widespread concern among global insurers, shipowners, and energy traders, as vessels begin rerouting away from one of the world’s most vital maritime arteries—the Strait of Hormuz.
The narrow strait, connecting the Persian Gulf to the Arabian Sea, is responsible for the transit of approximately 20% of global petroleum liquids. In 2023 alone, oil flows through the chokepoint averaged 20.9 million barrels per day, according to the U.S. Energy Information Administration.
Following successive Israeli airstrikes on Iranian nuclear and energy infrastructure since June 13, and Tehran’s retaliatory attacks on Israeli targets including Haifa port, the U.S. entered the conflict on June 22 with precision strikes on three nuclear enrichment sites in Iran. The military escalation has sent shockwaves through regional maritime trade and insurance markets.
According to data from industry tracker Kpler, at least six vessels—including two VLCCs (Very Large Crude Carriers), three chemical tankers, and one refined products carrier—diverted their routes between Sunday and Monday, opting to avoid the Strait of Hormuz entirely. This shift is further validated by Skuld, one of the world’s top marine insurers, which issued an advisory noting a drop in cargo-carrying vessels transiting the strait from 147 on June 9 to just 111 by June 15.
“Shipowners are adopting a more cautious approach amid rising geopolitical risks,“ the advisory read.
War risk premiums for ships entering high-risk zones have surged in response. According to Marcus Baker, Global Head of Marine and Cargo at Marsh McLennan, premiums for vessels sailing to Israeli ports have more than tripled—rising from 0.2% to 0.7% of the insured value of the hull and machinery (H&M). As reported by Platts, H&M premiums in the Red Sea have climbed to 0.25%-0.30%, up from 0.2%-0.25%, while in the Persian Gulf they have increased to 0.2% from 0.125%.
In a separate comment to the Financial Times, Baker noted: “It’s about the uncertainty premium – the price of not knowing when, or how, the next escalation may unfold.”
For a ship valued at $100 million, this means a per-voyage cost increase from $125,000 to as much as $200,000. Prior to this month’s hostilities, premiums for a seven-day stay in the Persian Gulf had remained steady at just 0.05%-0.07% for 18 months.
The uncertainty is especially acute for Greek shipowners, who have a significant presence in the region. According to sources from the Ministry of Shipping cited by the state-run Athens-Macedonia News Agency (AMNA), approximately 200 Greek tankers and commercial vessels are currently operating in the broader region of the Persian Gulf and the Gulf of Oman. Notably, Greek shipowners control the largest share of the world’s tanker fleet, underscoring their systemic importance in global energy logistics. Any disruption in Gulf navigation poses both national and global consequences.
The situation intensified further after the Iranian Parliament announced the formal closure of the Strait, a symbolic move that, if enforced by Tehran’s government, could signal that any vessel passing through may be considered a legitimate military target.
According to Athens-based Xclusiv Shipbrokers, the combined cost of H&M and P&I insurance for a Very Large Crude Carrier (VLCC) transporting oil from Ras Tanura, Saudi Arabia to Ningbo, China soared from $0.25 per barrel to as high as $0.80 overnight on June 13.
For now, shipping continues—cautiously—through the Strait of Hormuz. But the accumulation of military pressure points, navigation anomalies, and tactical uncertainty is testing the market’s capacity for resilience.
