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CommoditiesHigh Impact•2 March 2026•

1 min read

Shipping Costs Surge as Insurers Withdraw War Risk Coverage in Persian Gulf

Infographic of oil tankers and the Strait of Hormuz map with text showing a 9% oil price increase to 104.

Key Facts

1Major maritime insurers are ending war risk coverage for vessels transiting the Persian Gulf and the Strait of Hormuz.

2The termination of war risk coverage becomes effective at midnight London time on March 5, 2026.

Major global maritime insurers have announced the termination of war risk coverage for vessels transiting the Persian Gulf and the Strait of Hormuz, signaling a potential spike in shipping costs. The decision is set to take effect at midnight London time on March 5, 2026, impacting one of the world's most critical energy transit routes. The American Steamship Owners Mutual Protection and Indemnity Association (American P&I Club) has already issued a formal notice of cancellation regarding war risk exposures in the region. This withdrawal is driven by the escalation of conflict involving Iran, which has significantly increased the risk profile for maritime operations. Analysts expect the loss of insurance coverage to drive up operational expenses and heighten the risk of supply disruptions, typically a bullish driver for crude prices. As the Strait of Hormuz remains a vital chokepoint for global oil, these developments are being closely monitored by energy markets.