The Strait of Hormuz has become the world's most expensive shipping lane. Marine insurers across the London market have collectively recorded estimated claims between $1.5 billion and $2 billion as of late August 2026, with total losses potentially reaching $3 billion. Lloyd's of London alone faces an estimated £1.4 billion, approximately $1.9 billion.
The crisis began on Feb. 28, 2026, following US and Israeli airstrikes on Iranian positions. Tehran responded by blockading the strait, a critical global chokepoint for maritime trade that handles roughly one-third of seaborne oil exports.
War risk premiums for shipping in the Gulf region have surged dramatically. Before the conflict, companies paid roughly 0.25 percent of a vessel's hull value for war risk coverage. Rates have since climbed to between 3 percent and 10 percent at peak, representing a 12- to 40-fold increase depending on route and vessel type. A tanker with a $100 million hull value that previously incurred a $250,000 war risk insurance cost now faces premiums of $3 million to $10 million for a single voyage.
The incurred losses concentrate across three insurance lines: hull war, cargo and energy. These categories directly cover physical damage to vessels, lost goods and risks associated with transporting energy resources through hostile zones.
Between 14 and 17 seafarers have been killed as of mid-2026. An estimated 1,000 to 1,150 vessels are currently stranded or facing high-risk areas within the strait. The collective hull value of these ships exceeds $100 billion when cargo values are included.
The 2026 conflict stress-tests the marine insurance industry on a scale not witnessed in decades. The deployment of drones, missiles and sea mines introduces threats that differ significantly from historical models used for Gulf war risk products. Underwriters are repricing risks in real time, a departure from typical annual renewal cycles.
A brief ceasefire in June 2026 provided temporary relief, but hostilities resumed, maintaining elevated premiums and a rising count of stranded vessels. Lloyd's has publicly affirmed its commitment to maintaining coverage throughout the escalation. In response to concerns about private insurance withdrawal from the region, Lloyd's collaborated with Chubb to launch new war risk consortia in 2026, offering combined capacity up to $400 million.
