By Micah Jonah, March 3, 2026
Maritime insurers have begun cancelling war risk coverage for vessels operating in the Gulf region following escalating hostilities between Iran, Israel and the United States, raising fears of a sharp spike in global energy costs.
The move came after Iran’s Revolutionary Guard Corps declared the Strait of Hormuz “closed”, warning that vessels attempting passage could be targeted. At least five tankers have reportedly been damaged in recent days, two crew members killed, about 150 ships left stranded around the vital shipping corridor.
The Strait of Hormuz handles roughly one fifth of the world’s oil supply and significant volumes of liquefied natural gas from Gulf producers including Saudi Arabia, Iraq, the UAE and Qatar. Any prolonged disruption is expected to reverberate through global markets.
Insurance giants, including Gard, Skuld, NorthStandard, the London P&I Club and the American Club have issued notices cancelling war risk coverage effective March 5.
Industry sources say war risk premiums have surged from about 0.2 percent of a vessel’s value last week to as high as 1 percent in the past 48 hours. For a tanker valued at $100 million, that translates to insurance costs jumping from roughly $200,000 per voyage to about $1 million.
Energy markets have already reacted sharply. Brent crude futures rose by as much as 13 percent, while European and Asian gas prices surged following production disruptions in Qatar. Analysts warn that higher insurance and shipping costs will inevitably be passed on to consumers, pushing up fuel, electricity and heating prices worldwide.
Shipping firms are now weighing whether to reroute vessels or suspend operations in the region altogether, as uncertainty persists over how long the crisis will last.
Observers say the waterway could reopen fully if a ceasefire is reached or if a visible multinational naval escort is deployed to safeguard commercial traffic. Until then, the Gulf shipping crisis threatens to deepen the economic fallout of the widening Middle East conflict.
