War Risk Insurance Premiums for Ships in Strait of Hormuz Halved as Cease-fire Effects Take Hold

Insurance premiums for ships passing through the Strait of Hormuz, a critical artery for global crude oil transport, have plummeted.
The Financial Times (FT) reported on June 24 (local time) that war risk insurance premiums applied to vessels transiting the Strait of Hormuz have fallen by more than half just six days after the cease-fire agreement between the United States and Iran.
Immediately before the cease-fire, war risk insurance premiums had reached approximately 5% of a vessel's value.
In particular, shortly after the U.S. and Israel attacked Iran in February, insurers faced criticism for raising premiums for shipping companies by up to 20 times compared to pre-war levels.
Some supertankers were forced to pay war risk insurance premiums amounting to millions of dollars per week.
However, these war risk premiums have now dropped to around 2%.
Industry experts suggest that if the cease-fire agreement between the U.S. and Iran continues to be observed without issues, there is a possibility that premiums could fall further.
According to trade intelligence firm Kpler, at least 172 vessels have passed through the Strait of Hormuz since June 18.
A representative of a shipping company explained, "Decisions on whether to operate vessels are made by comprehensively reviewing three conditions: risk assessments from professional consulting firms, the availability of insurance, and the consent of charterers," adding, "An environment is currently being created where the resumption of operations can be considered."
Despite the sharp drop in insurance premiums for the vessels themselves, it is reported that war risk insurance premiums for cargo, such as crude oil and grain, have not yet seen significant changes.
James Reason of insurance brokerage firm WTW stated, "The industry remains cautious because there are reports that mines may still remain in some shipping lanes of the Strait of Hormuz."
※ Please note: This article was translated by AI and may contain errors.