The question
Strait of Hormuz war-risk insurance rate.
The rate
8.0×
War-risk insurance for a Strait of Hormuz transit is running at 8.0× the peacetime rate. A single VLCC voyage now costs around $2.5M to insure, up from roughly $125k in peacetime. At this level, spot transit is priced beyond the reach of most operators even while the strait remains physically passable.
What the rate reflects.
Live indicatorsPremium multiple
8.0×
of peacetime rate
VLCC voyage now
$2.5M
per transit · spot
Peacetime
$125k
per transit · baseline
Underwriters withdrawn
6
clubs / quotas pulled
Lloyd's JWC
Listed
Arabian Gulf area
Source: Lloyd's Joint War Committee
How the premium is set.
War-risk insurance is separate from a vessel’s ordinary hull-and-machinery cover. It is priced per voyage as a percentage of the insured hull value, and it spikes the moment Lloyd’s Joint War Committee lists the waters a ship must cross.
When the Arabian Gulf is listed, underwriters reprice every transit. A rate quoted as a small fraction of hull value in peacetime can climb to several times that during a crisis, which is why we track the figure as a multiple of the peacetime baseline rather than an absolute dollar amount.
Once that multiple reaches roughly four, spot transit is priced out for most operators and the strait is effectively closed to ordinary commercial traffic, even though a vessel could physically make the passage. For the full mechanics, see the war-risk insurance explainer.
Frequently asked.
FAQWhat is the current war-risk insurance rate for the Strait of Hormuz?
War-risk insurance for a Strait of Hormuz transit is running at 8.0× the peacetime rate. A single VLCC voyage now costs around $2.5M to insure, up from roughly $125k in peacetime. At this level, spot transit is priced beyond the reach of most operators even while the strait remains physically passable.
How much does it cost to insure a tanker through the Strait of Hormuz?
A single VLCC voyage currently costs around $2.5M to insure for war risk, against roughly $125k in peacetime. War-risk premium is quoted as a percentage of hull value per voyage, so the figure scales with the vessel and the listed-area rate.
What is the Lloyd’s Joint War Committee?
The Joint War Committee (JWC) is a London-market body that publishes the list of areas considered enhanced war, strikes, terrorism, and related-perils risk. When the JWC lists an area such as the Arabian Gulf, underwriters reprice cover for voyages through it, which is the mechanism that pushes the Hormuz premium to a multiple of the peacetime rate.
Why can insurance close the strait even when it is physically open?
Most commercial operators will not sail an uninsured hull through a war-listed area, and charterers will not accept the liability. Once war-risk premium reaches roughly four times the peacetime rate, the economics of a transit collapse for all but the highest-value or state-backed cargoes, so the strait is effectively closed to ordinary commercial traffic regardless of whether a vessel could physically pass.
Cite this page
Strait of Hormuz war-risk insurance posture per Lloyd's Joint War Committee listed-area status, as surfaced by straits.live. Source: https://straits.live/strait-of-hormuz-war-risk-insurance-rate
War-risk insurance explained →Is the strait open? →Methodology →