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Trump threat to Oman raises uncertainty for Strait of Hormuz marine cover
War risk marine insurance premiums around the Strait of Hormuz have jumped to about 3% of vessel value versus roughly 0.25% before the February conflict.
Insurance Business reports that President Donald Trump’s threat to bomb Oman if the US ally interferes with Washington’s negotiations over Iran has added further uncertainty to marine insurance conditions around the Strait of Hormuz.
The coverage dynamics matter for insurers because Oman controls the southern side of the strait, which has become a chokepoint since Iran restricted most movement through the waterway following the start of the US-Israel conflict with Tehran in February. Before that, about 130 to 140 vessels typically crossed daily, but traffic has fallen to as few as eight tracked ships per day, according to Reuters.
With shipping disrupted for nearly six months, marine war risk pricing has been reshaped. Reuters reported that war risk premiums surged after hostilities began, reaching around 3% of vessel value compared with about 0.25% before the conflict, which for tankers valued at $200 million to $300 million can translate into war risk premiums running into several million dollars.
Coverage is not described as unavailable, but it can change quickly: war risk insurance for these voyages is typically written for seven-day periods with reviews every 24 to 48 hours, leaving shipowners exposed to sharp cost swings over short timeframes. The Lloyd’s Market Association said war insurance continues to be offered through Lloyd’s and London company markets for vessels transiting Hormuz, while P&I liability coverage is available through International Group clubs.