Strait of Hormuz: Iran's "Oasis" for the Insurance Industry

When the Strait of Hormuz remains turbulent, the world is not only concerned about oil supplies but also the stability of the global insurance system. This narrow waterway, long the lifeline of global energy distribution, has suddenly become a space of uncertainty. It is where logistics, geopolitics, and risk calculations converge under the same load and pressure.

In recent weeks, escalating tensions in the region have triggered a swift response from the global maritime insurance market. War risk premiums, for example, have suddenly surged sharply. Risks that were previously calculable now move into territory far more difficult to predict by underwriters.

Surge in Premiums and New Reality

The most palpable impact has emerged in Marine Hull Insurance. High-value tankers such as Very Large Crude Carriers (VLCCs) now face additional costs of millions of dollars for a single voyage. In such situations, insurance premiums are no longer merely an additional cost component but a determining factor in the voyage’s feasibility.

Marine Cargo Insurance is not spared from the pressure. Cargoes of crude oil and energy products are now subject to significant additional premiums. Underwriters are responding with greater caution, from raising premium rates and tightening terms and conditions to, in some cases, limiting coverage capacity.

This situation reminds us that in the insurance industry, risk perception often moves faster than the facts on the ground. When uncertainty increases, the market reacts, and that reaction is almost always reflected in premium prices. Everyone feels the pressure.

Reinsurance Under Pressure

This pressure does not stop at the level of insurance companies issuing policies. The global reinsurance sector also feels the impact. As the last layer of protection, reinsurance faces the potential for much larger accumulated claims if a significant incident occurs in the area.

In such conditions, reinsurers not only bear individual risks from one ship or one shipment but can also face systemic, aggregate risks. A major incident in the Strait of Hormuz could potentially trigger chain claims from interconnected policies, from Marine Hull Insurance and Marine Cargo to Energy insurance.

This places reinsurance in a highly sensitive and dilemmatic position. They must balance maintaining market capacity or avoiding excessive exposure. In many cases, the response is adjustment of premium prices, tightening of terms and conditions, and limitation of reinsurance capacity. In such conditions, reinsurance will tighten its stance even further.

In practice, such conditions are not entirely new. However, the scale this time feels different. The increasing value of ships, rising trade volumes, and tighter global interconnections make risk exposure far more complex than before. On the other hand, reinsurers also face pressures from capital and global risk accumulation. When several high-risk areas escalate simultaneously, the reinsurance capacity to absorb risks becomes increasingly limited. It is understandable that they become very cautious in deciding on risks.

An Oasis Amid Tension

Amid this pressure, a development has emerged that slightly alleviates concerns. Iran has begun granting permissions to ships from certain countries deemed non-hostile to cross the Strait of Hormuz through a more structured coordination mechanism. Based on reports from Al Jazeera and Bloomberg in mid-March 2026, Iran has started permitting ships from countries considered “non-enemies” to cross the Strait of Hormuz, such as China, Russia, Pakistan, Iraq, and India. Most recently, Iran has granted permissions to ships from Thailand and Malaysia. Unfortunately for Indonesia, as of 26 March 2026, two Pertamina tankers, PIS VLCC Pertamina Pride and Gamsunoro, remain detained in the Arabian Gulf and have not yet obtained access to cross the Strait of Hormuz.

Nevertheless, for industry players, the permissions granted by Iran serve as a kind of “oasis” amid the uncertainty. The existence of a more controlled crossing route allows for more measured risk assessments. Ships that obtain permissions and follow certain routes can now be considered to have a relatively lower risk profile compared to uncoordinated voyages. The impact can be felt immediately. Premiums have not yet dropped significantly but are starting to show stability. In the context of global energy trade, such stability is often more important than price reductions themselves.

However, this leniency does not entirely eliminate uncertainty. Risks in the Strait of Hormuz are no longer merely geographical but have also become political. Shipping access depends on perceptions and decisions that are not always predictable by underwriters. This demands a different perspective and approach from underwriters. Risk calculations can no longer rely solely on historical data but must also be able to read changing policy dynamics and inter-country relations.

In the end, what is happening in the Strait of Hormuz shows us all that the insurance industry does not operate in a vacuum. It moves with the pulse of global geopolitics. When tensions rise, premiums rise accordingly. When room for negotiation opens, the market begins to find its balance. Everything runs dynamically.

The Strait of Hormuz may be just a narrow line on the world map. But do not be mistaken! According to the Joint Maritime Information Centre, s