Shipping Costs Surge as Insurers Drop War Risk Protection in Gulf

Core Viewpoint - Major maritime insurers are terminating war risk coverage for vessels in the Persian Gulf and the Strait of Hormuz due to escalating conflict in Iran, effective March 5, 2026 [1][2]. Group 1: Insurance Coverage Changes - The American Steamship Owners Mutual Protection and Indemnity Association has issued a Notice of Cancellation for war risks in the Persian/Arabian Gulf and Gulf of Oman, effective 72 hours after March 2, 2026 [2][3]. - The London P&I Club and Assuranceforeningen Skuld have also announced similar cancellations of war risk coverage, citing increased geopolitical and operational uncertainty [3]. Group 2: Financial Implications - Prior to the conflict escalation, war risk premiums for the Persian Gulf were approximately 0.25% of a vessel's hull value [4]. - Insurance rates are projected to increase by 50% or more, meaning that for a $100-million supertanker, insurance costs could rise to $400,000 per voyage from about $250,000 [5].