Gulf Shipping Insurance Costs Surge Up to 50% amid Rising Risks in Strait of Hormuz

Marine insurance companies have raised coverage prices for ships transiting the Gulf and the Strait of Hormuz by as much as 50% following escalating military tensions after strikes by the United States and Israel on Iran.

Insurance brokers told the Financial Times that some insurers issued rare cancellation notices ahead of the weekend trading session, a move seen as a prelude to repricing policies at significantly higher rates in the coming days.

Baseline war-risk insurance costs for vessels sailing through the Gulf were previously around 0.25% of a ship’s replacement value, according to Dylan Mortimer, who oversees hull and war-risk insurance at brokerage Marsh McLennan.

Those premiums could climb by about half as insurers factor in the possibility of further regional escalation.

Insurance costs for ships heading to Israeli ports, which stood near 0.1% of vessel value before the latest strikes, may also rise by up to 50%.

The insurance market is particularly concerned about the possibility that Iran or its regional proxies could attempt to restrict navigation through the Strait of Hormuz, through which roughly 20% of the world’s seaborne crude oil flows.

The United Kingdom Maritime Trade Operations reported multiple vessel alerts in the Gulf, while European naval mission EUNAVFOR Aspides said ships had received high-frequency broadcasts purportedly from Iran’s Revolutionary Guard warning that no vessel was permitted to cross the strait.

Some global oil and gas tankers have already paused or rerouted voyages through the waterway amid security concerns.

At least three vessels altered their routes on Saturday while awaiting further security assessments, according to maritime intelligence consultancy EOS Risk Group.

Shipping companies are increasingly exploring alternative routes to avoid the narrow chokepoint, reflecting growing anxiety over potential attacks, boarding attempts, or vessel detentions in the region.

The Strait of Hormuz remains one of the world’s most strategically sensitive energy corridors, and any prolonged disruption could significantly affect global shipping, insurance markets and oil prices.