Strait of Hormuz war risk premiums halve to 2% after US-Iran deal

War risk insurance premiums for vessels transiting the Strait of Hormuz have plunged to about 2% of vessel value from 5% in the six days since the US and Iran signed a ceasefire deal, as shipping confidence returns to the world's most strategically important energy chokepoint.

"Now vessels are trading normally and insurance capacity is abundant," Marcus Baker, global head of marine, cargo and logistics at insurance brokerage Marsh, said. The drop cuts insurance costs by hundreds of thousands of dollars per vessel, with some very large crude carriers previously paying millions of dollars per week in premiums.

At least 172 ships have crossed the strait since June 18, the day after the deal was signed, according to maritime intelligence firm Kpler. That includes 42 crossings on Saturday alone, though daily traffic remains well below the pre-conflict average of about 138 vessels per day. Brent crude, the global oil benchmark, has fallen to its lowest level since the war began as supply disruption fears ease.

The Strait of Hormuz normally handles 20% to 25% of the world's oil trade. During the blockade, daily transits collapsed to as few as two to four vessels, leaving roughly $125 billion of vessels and cargo stranded in the Persian Gulf, according to Allianz Commercial's Safety and Shipping Review 2026. The insurer said 46 merchant vessels were damaged and 14 seafarers had lost their lives as of mid-June.

Insurance divergence signals lingering risk

While hull war risk premiums have fallen sharply, cargo insurance covering oil, grain and other commodities has remained flat since the agreement, reflecting a structural divide in how the insurance market assesses the ceasefire's durability.

"Provided the US-Iran agreement holds and there are no surprises, premiums will continue to improve," James Reason, a broker at WTW, said. "But everyone remains cautious — there are still reports of mines in parts of the strait."

The Joint Maritime Information Center, a multinational group that includes the US, has warned vessels to avoid the central shipping lanes "due to the existence of mines" and recommended a narrower southern route closer to Oman's coast. Iran's Islamic Revolutionary Guard Corps declared the strait closed again on June 20 in response to Israeli strikes on Lebanon, though traffic continued to flow through both the Iranian-controlled northern route and the Omani southern corridor.

Shipping companies are requiring three layers of approval before transiting: a risk assessment from a specialist consultancy, confirmed insurance coverage, and agreement with the vessel's charterer. "You need all three to give something like a green light before you can make a decision," one shipping company executive said.

Tolls and the legal question

The interim agreement grants Iran authority to manage the strait for 60 days while holding discussions with Oman and six other Gulf states on its long-term administration. Iran's Persian Gulf Strait Authority has said no vessel may pass without a valid permit, though Tehran agreed not to charge tolls during the negotiating period.

President Donald Trump has suggested the US could impose its own tolls if a final deal is not reached, describing the US as the "Guardian Angel to the countries of the Middle East." Legal experts say any toll regime would violate the UN Convention on the Law of the Sea, which guarantees freedom of transit passage through international straits. Neither the US nor Iran has ratified the treaty, but both are members of the International Maritime Organization, which oversees global shipping standards.

The last time a major energy chokepoint faced sustained disruption — during the Iran-Iraq war in the 1980s — the Strait of Hormuz remained open throughout. The current closure is the first in modern history, and analysts say it could take months for trade flows to normalize even if a final deal is cemented.

This article is for informational purposes only and does not constitute investment advice.