When President Trump announced a two-week ceasefire with Iran on Tuesday evening, energy traders exhaled, stock markets surged and oil fell 12% in a single session. But in the underwriting rooms of Lloyd's of London, the reaction was considerably more measured.
The reason is simple, if little understood outside the specialized world of marine insurance: the economic blockade of the Strait of Hormuz was not imposed solely by Iranian missiles and sea mines. It was also imposed, with surgical precision, by a handful of insurance companies filing paperwork.
Within 48 hours of the United States and Israel launching coordinated strikes on Iran on February 28, war risk premiums for vessels transiting the strait surged fivefold. By March 5, seven of the 12 clubs belonging to the International Group of Protection and Indemnity Clubs - mutual insurers that collectively cover 90% of the world's ocean-going tonnage - had issued 72-hour cancellation notices for war risk coverage across the Persian Gulf, the Gulf of Oman and Iranian territorial waters. Tanker traffic through the strait collapsed by more than 80 percent. In many respects, the commercial shutdown preceded the physical blockade.
A ceasefire, however welcome, does not automatically undo that calculation.
"Time will tell whether it is a pause or a peace but, in the meantime, it is highly unlikely that trade into the Gulf will simply resume," Neil Roberts, head of marine and aviation at the Lloyd's Market Association, said in a statement this week. "The region remains at heightened risk with none of the underlying tensions resolved."
Before the war began, insuring a very large crude carrier - a supertanker capable of carrying two million barrels of oil - for a transit through the Strait of Hormuz cost roughly 0.2% of the vessel's hull value, or a few hundred thousand dollars for a round trip. Within days of the first strikes, those rates had climbed to between 1.5 and 3% of hull value, with vessels deemed to have American, British or Israeli connections charged as much as 5%. For a tanker worth $150 million, that represents an insurance bill of up to $7.5 million for a single voyage.
At those rates, the economics of shipping Gulf crude to Asia begin to collapse. Johannes Rauball of Kpler, a data and analytics firm, has estimated that a $4 million fee for a round trip could push smaller vessels - such as Aframax tankers - out of the market altogether.
"Interest in getting vessels through the Strait of Hormuz has picked up significantly this week," one Lloyd's underwriter said after the ceasefire announcement. But interest and action are different things. As of Thursday, ship-tracking data showed only a trickle of vessels daring the crossing: five bulk carriers in the first 24 hours of the truce, according to Kpler, compared with a prewar average of more than 100 vessels daily.
The hesitation is not entirely about price. It is about what insurers call the risk environment - and that environment remains acutely uncertain. Iran has released maps suggesting it may have mined parts of the strait and has directed vessels to follow specific new routing lanes under Iranian supervision. Its Revolutionary Guards have said that ships wishing to transit must first coordinate with Iranian armed forces. "The Strait of Hormuz is not open," Sultan Al Jaber, chief executive of Abu Dhabi National Oil Company, said on Thursday. "Access is being restricted, conditioned and controlled."
Iran has also reportedly indicated it intends to charge ships a toll for passage - potentially in cryptocurrency, according to a report in the Financial Times. "Charging a toll for transits through an international waterway would be outside international norms and realistically would undermine international law," said John Stawpert, marine director at the International Chamber of Shipping.
Such uncertainty is precisely the kind of ambiguity that insurance markets price heavily - or decline to price at all.
The marine insurance industry has a recent and sobering parallel to study. When the Houthi militia ceased attacks on commercial shipping in the Red Sea in October 2025, Maersk - one of the world's largest shipping lines - waited two months before sending its first vessel through that waterway again. Normal traffic has still not fully resumed. War risk premiums in the Red Sea, which surged 20-fold in January 2024, remained substantially elevated in early 2026 despite a significant reduction in attacks.
"I don't see anybody bringing ships inside the Gulf right now," Anne-Sophie Corbeau of Columbia University said in the days following the ceasefire announcement.
The structural reasons for this caution are embedded in how war risk insurance works. When conflict breaks out, underwriters do not simply switch coverage off and then switch it on again when fighting stops. Coverage must be renegotiated individually for each vessel, on a voyage-by-voyage basis, with fresh actuarial assessments made by each layer of the reinsurance chain. Capacity withdrawn at the treaty reinsurance level must be reinstated through negotiation, not by political announcement. The Lloyd's Market Association has confirmed that war insurance technically remains available for Hormuz transits - it is simply that premiums remain so elevated, and the conditions so uncertain, that most shipowners and their crews are not prepared to accept the terms.
Jakob Larsen, chief safety and security officer at BIMCO, the leading organization for shipowners and charterers, warned that "leaving the Persian Gulf without prior coordination with the US and Iran would entail heightened risk and would not be advisable."
The human and logistical scale of what a genuine reopening would require is staggering. According to Kpler, 187 tankers remain trapped in the Gulf, loaded with 172 million barrels of crude and refined products - enough to fuel Britain for more than 100 days. Some 15 liquefied natural gas tankers are also stuck. Around 1.9 million tonnes of fertilizer sit on 41 vessels. The International Maritime Organization has said that 20,000 seafarers are awaiting evacuation, having spent more than a month in a "tense and volatile situation, unable to leave their ships," according to Damien Chevallier, the Director of IMO's Maritime Safety Division.
Even once those vessels begin to move, the downstream effects on commodity markets will take months to work through. Qatar's Ras Lafan export facility - the world's largest liquefied natural gas plant - lost 17% of its capacity in a drone strike and may take years to fully repair. Gulf crude output has been cut by more than 10 million barrels a day since the start of the war. Resuming that production safely, without damaging reservoir infrastructure, requires specialist teams that will quickly become overstretched if multiple fields attempt to restart simultaneously.
For shipping insurers, the calculus will not change until the physical risk does. A ceasefire between adversaries who continue to contest its terms - Iran accused the United States of violations within hours of the truce taking effect, citing Israeli strikes in Lebanon - is not the same as a stable security environment. Lloyd's Joint War Committee, which maintains the list of geographic areas deemed too dangerous for standard marine coverage, has included the waters around Oman in its high-risk designation. That listing will not be removed until the committee judges the threat to have materially diminished.
Even in the optimistic scenario - a ceasefire that holds, negotiations that progress, a gradual restoration of shipping - industry analysts expect the Strait of Hormuz to carry a lasting risk premium for years to come. The war demonstrated, in ways that decades of theoretical concern had not, that the strait could be closed. That knowledge is now priced into every future actuarial model.
The Economist, in an analysis this week, estimated that futures markets expect Brent crude to end 2026 at around $75 a barrel - roughly a quarter higher than was expected before the war began. Similar elevated premiums are expected to persist across gas, fertilizer, and petrochemical supply chains.
For marine underwriters, the lesson of the past six weeks may prove to be the more durable one: that in modern conflict, commercial infrastructure is not merely the backdrop against which war is fought. It is, increasingly, the medium through which it operates. The strait was closed not only by mines and missiles, but by a recalculation in a London underwriting box. Reopening it - fully, stably, affordably - will require a great deal more than a two-week truce.
