As the Middle East conflict between Iran, the United States and Israel deepens, major marine insurers have taken the extraordinary step of withdrawing war risk insurance for vessels operating in and around Iranian waters, the Persian Gulf and the strategic Strait of Hormuz. This marks one of the most significant disruptions to shipping risk coverage in years, reflecting surging threats to maritime safety.
📉 What Is Happening
Marine underwriting groups — including well-known clubs and insurers such as Gard, Skuld, NorthStandard, the London P&I Club and the American Club — have announced that war risk policies will be excluded for ships navigating the high-risk Gulf waters starting March 5, 2026. Those policies traditionally protect vessels against losses from military actions, strikes, sabotage and related perils.
“The risk environment has deteriorated so rapidly that reinsurers are withdrawing capacity, forcing primary insurers to cancel war risk cover in the affected areas.”
— Marine insurance industry notices on cancellation effective March 5, 2026.
This decision comes after a round of retaliatory strikes in the conflict, which have reportedly damaged at least three oil tankers, killed a seafarer, and left more than 150 commercial vessels anchored and unable to transit through the Strait of Hormuz — one of the world’s busiest energy gateways.
📦 Impact on Shipping and Trade
Without war risk cover, shipowners face a stark choice: either avoid the Gulf altogether or seek alternative (and often much longer) routes such as around the Cape of Good Hope in southern Africa. Many carriers — already skittish about transit danger — are signaling they will avoid the region, pushing freight and insurance costs sharply higher.
“War risk cover will be excluded in Iranian waters and surrounding Gulf waters,”
— Notice posted on insurers’ websites outlining cancellation zones.
Market sources report that freight rates from the Middle East to Asia have surged, reaching multi-year highs as fewer tankers are willing to transit the Gulf’s central shipping lanes. Analysts say that the knock-on effects on global fuel supplies could be profound if the conflict persists.
🧭 Why This Matters
The Persian Gulf and Strait of Hormuz together account for a large share of global oil exports — historically about 15–20% of total flows. When insurers refuse to back vessels against war risks, commercial operators must either pay much higher premiums, absorb potential losses, or reroute entirely.
This shift highlights how deeply geopolitical tensions can penetrate global logistics:
- Insurance markets retreat as perceived conflict risk spikes;
- Shipping lanes become more expensive or undesirable;
- Commodity flows — especially energy — face new friction points.
📌 Final Note
Marine insurers have not withdrawn all forms of coverage — general liability, hull and other non-war policies remain in force — but the removal of war risk protection is a stark warning sign. It illustrates how the ongoing conflict is now reshaping real economic and trade realities, not just battlefield headlines.