Maritime insurers cancel war risk cover in Gulf: Will it spike energy cost?
Al Jazeera
March 3, 2026
AI-Generated Deep Dive Summary
The widening conflict between the US/Israel and Iran has led maritime insurers to cancel war risk coverage for vessels in the Middle East Gulf, raising concerns about surging energy costs. This decision comes after Iran’s Revolutionary Guard Corps (IRGC) declared the Strait of Hormuz “closed,” warning that any passing vessel would be set ablaze. The move has disrupted shipping, damaging at least five tankers, killing two crew members, and leaving 150 ships stranded near the strait.
The situation escalated as IRGC reported attacks on several tankers, including the burning of a Honduran-flagged vessel and damage to a US tanker that resulted in one fatality. These incidents have caused oil and natural gas prices to surge, with Brent crude futures rising by 13%. The disruption has also led to global shipping backups, with about 10% of container ships delayed, potentially causing cargo pileups at major ports in Europe and Asia.
Maritime insurers, including Gard, Skuld, and the London P&I Club, have announced that war risk coverage cancellations will take effect from March 5. This leaves shipping companies in the region seeking new insurance at significantly higher costs. War risk premiums have skyrocketed to 1% of a ship’s value—up from 0.2% just days prior—adding millions of dollars to each voyage.
The situation highlights the broader implications for global energy markets and trade, as the conflict’s perceived threats have effectively closed the Strait of Hormuz in terms of insurance coverage. This closure, combined with ongoing attacks on vessels, has created a tense environment that is likely to further disrupt oil supplies and drive up costs globally.
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Originally published on Al Jazeera on 3/3/2026