The Hormuz Premium: Pricing an Open-Ended War

MARITIME & ENERGY DESK (as of July 21, 2026): War-risk marine insurance is the clearest real-time indicator of Strait of Hormuz crisis severity — ~1/5 of global oil/LNG trade transits the strait. Rate trajectory: pre-war ~0.15-0.25% of vessel value → peaked ~10% at March conflict height → softened to ~2% after June US-Iran MoU → back up to ~5% (new market norm) following July tanker attacks incl. Iranian strikes on UAE-flagged supertankers Mombasa and Al Bahyah (1 sailor killed). For a $100M tanker: ~$250K pre-war premium vs. ~$5M now, per transit. Fewer transit inquiries reported despite stabilizing headline rates — quiet caution signal distinct from price. ~25% of stranded non-Iranian vessels have found ways out; AIS transponders going dark on remaining traffic obscures real volumes. IMO has advised against transiting the strait altogether. ~6,000 seafarers estimated stranded. US floated $20B DFC reinsurance backstop to stabilize insurer participation — details thin, insurer interest preliminary; government backstop is itself the tell that private pricing can't sustain the chokepoint alone. Direct link to West Asia Desk coverage: UK's base-access justification (degrading mine/missile capability) is measurable against this exact data — premiums and transit volumes should fall if the campaign is succeeding; neither has happened in 5 months, and July's spike suggests the opposite. Forward watch: premium direction post any ceasefire attempt, IMO advisory changes, whether DFC reinsurance backstop actually launches. Sourcing: Xinhua/People's Daily (Lloyd's Market Association), The National, Claims Journal/Insurance Journal (Marsh), Wikipedia crisis tracker.