Strait of Hormuz Insurance Premiums Spike After Ceasefire Collapse

Maritime war-risk insurance premiums for vessels transiting the Strait of Hormuz have surged following the collapse of a ceasefire between the United States and Iran. Rates, which had dropped to 2% in June after the signing of the Islamabad Memorandum of Understanding, climbed to between 2% and 6% this week after Iranian attacks on three commercial vessels. These attacks prompted Donald Trump to declare the ceasefire over during a NATO summit on July 9 and authorize strikes against approximately 90 military targets across Iran.

The current volatility follows a broader pattern of escalation that began on February 28, when the Government of Iran blockaded the strait in response to U.S. and Israeli strikes. During that initial crisis, premiums spiked as high as 10% of a vessel's value. While rates later settled between 1% and 3%, underwriters at Lloyd's of London shifted to shorter pricing windows, sometimes adjusting rates just six hours before transit.

The conflict has resulted in at least 14 seafarer deaths and over 50 ship attacks. Allianz reports that 1,150 cargo vessels valued at $125 billion remain stranded in the Persian Gulf, while the United Nations reports 6,000 seafarers are stranded in the channel. The International Maritime Organization has advised ships to avoid the waterway entirely until crew safety can be guaranteed.