Before the U.S.-Iran conflict, nearly 15 million barrels of crude oil transited the Strait of Hormuz every single day—roughly 34% of all global crude oil trade.
Then the missiles started flying… and suddenly the critical trade route was more or less cut off, with tanker traffic dropping by 95%.
Most coverage is focused on Iran’s missiles, warships, and military threats.
But the real story is more complicated… and more consequential for your portfolio.
The insurance problem
Before the conflict, insuring a tanker for a Hormuz transit cost roughly 0.25% of vessel value. On a $200–$300 million tanker, that’s about $500,000–$750,000 per voyage. Already not cheap.
Then the war broke out… and maritime insurers immediately started pulling back war-risk coverage, or repricing it so aggressively that many operators simply couldn’t afford to sail.
War-risk premiums surged to 1–1.5% of vessel value, peaking at approximately 2.5% in early March.
On a $100 million tanker, that’s the difference between a $250,000 insurance bill and a $1 million one—for a single trip.
As of late March, premiums had eased back to around 1% but were still running significantly above pre-war levels.
At one point, more than 150 tankers—including crude and LNG vessels—had dropped anchor in Gulf waters rather than attempt a transit.
Simply put, the standstill isn’t only about missiles and warships. It’s also about underwriters deciding the math no longer works.
That’s a huge deal.
The second-order effects
Most financial media coverage is focused on oil and misses the deeper structural disruption.
When tankers can’t get insurance, they can’t move cargo. When cargo can’t move, refineries don’t get feedstock. When refineries don’t get feedstock, fuel prices climb—not just at the pump, but in every supply chain that runs on energy.
That means food, manufacturing, air travel… everything.
The insurance market is the mechanism by which geopolitical risk gets transmitted into the real economy.
And right now, that mechanism is under enormous stress.
What this means for investors
There are a few places worth watching.
First, tanker names like Frontline (FRO), DHT Holdings (DHT), and Teekay Tankers (TNK) that can continue to operate are commanding crisis-level rates.
Second, any sustained disruption to a third of global crude trade is a structural support for oil prices. That benefits integrated majors like ExxonMobil (XOM) and Chevron (CVX).
Third, and most underappreciated, the insurers themselves. Chubb (CB) is the lead partner in a U.S.-backed maritime insurance facility covering war hull risk, war P&I, and war cargo insurance for eligible vessels transiting the Strait of Hormuz. That’s a company that sees both the risk and the opportunity clearly.
Bottom line
Geopolitical crises tend to get framed as military chess matches. But the lever that actually moves markets is almost always financial infrastructure: credit, insurance, payment rails, etc.
With the Strait of Hormuz situation, war-risk underwriters are helping dictate where oil flows.
That’s the real chokepoint.
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References:
Hormuz shipping traffic down ~95% from pre-war average of 178 ships/day — World Economic Forum
Nearly 15 million b/d of crude, ~34% of global crude oil trade, passes through Hormuz — IEA / Speed Commerce
Pre-conflict war-risk premium ~0.25% of vessel value; ~$500,000–$750,000 per transit on a $200–$300M tanker — Economist Intelligence Unit
War-risk premiums trending 1–1.5% of vessel value during conflict — Reuters / Marsh
Premiums peaked ~2.5% in early March, eased to ~1% by late March — still ~8x pre-war levels — Albany Antree / S&P Global
For a $100M tanker, war-risk premium jumped from ~$200,000 to ~$1M per voyage — Al Jazeera
Over 150 vessels including oil and LNG tankers anchored in/around Hormuz rather than transit — The Guardian
Brent crude surged 10–13% to ~$80–$82/barrel in first days of crisis — Wikipedia / 2026 Iran war fuel crisis
Teekay Q2 2026 tanker rates at record levels due to Hormuz disruption — Cyprus Shipping News
