Hormuz Reopening Won't Mean Cheap Shipping: Marine War-Risk Premiums Still 30x Pre-Conflict Levels

The landmark US-Iran agreement may reopen the Strait of Hormuz, but marine insurers are warning that the practical realities of restoring safe passage — and affordable insurance — will take far longer than a signing ceremony. According to industry participants, war-risk premiums for the Persian Gulf region remain running as much as 30 times above pre-conflict levels even after the deal announcement.

The scale of the repricing has been dramatic. Before the conflict began in late February 2026, war-risk premiums averaged roughly 0.1% to 0.25% of a vessel's hull replacement value, according to data from S&P Global. As hostilities escalated, premiums for the broader Persian Gulf rose to around 1%, while rates for vessels actually transiting the Strait of Hormuz itself climbed to approximately 7.5% at the peak before easing back to between 2.5% and 3%. In absolute terms, insuring a single large oil tanker worth $100 million has cost between $3 million and $8 million per transit during the crisis.

Seb Simmonds, managing director of public sector and international at PEN Underwriting, captured the industry's wariness: 'As you can imagine, we've all been sitting with bated breath, watching the market and seeing what's going to happen. The region remains highly volatile, and it's still a very difficult environment.' A Howden Re analysis described conditions across marine hull war, cargo war, and political violence markets as being under 'extreme' pressure throughout the conflict, with at least 9–15 tankers having sustained damage since hostilities began.

Several structural factors will keep premiums elevated. First, mine-clearance: US defence officials estimate clearing naval mines across the waterway could take up to six months. Jakob Larsen, head of maritime security at BIMCO, warned that residual mine risks alone could delay full restoration of commercial traffic, with confined navigation corridors only about 3km wide in each direction restricting throughput even after safe passage resumes. Second, insurers embedded seven-day cancellation provisions in war-risk policies during the crisis, allowing rapid withdrawal and repricing of cover — a structural caution that will persist. Third, Svein Ringbakken, managing director of the Norwegian Shipowners' Mutual War Risks Insurance Association, noted that thousands of ships remained trapped in and around the waterway as of mid-June.

Marine insurers say they require months of sustained stability and demonstrated security before restoring anything resembling normal pre-war cover, meaning the cost of moving oil and goods through the world's most critical energy chokepoint will remain elevated well after the political agreement is signed.