Insuring a tanker for a single trip through the Strait of Hormuz now costs about 6% to 10% of the ship’s hull value in war-risk premiums, insurance brokers told the Financial Times in early October 2026. Before the U.S.-Israeli war with Iran began on Feb. 28, the same cover typically cost 0.15% to 0.25%. For a $100 million tanker, that is the difference between about $250,000 and $6 million to $10 million for one voyage. The Financial Times reported that this can mean up to $20 million in war insurance for one supertanker voyage into the Gulf.
Top photo: The tanker Omala loads crude at Iraq’s Al Basrah Oil Terminal in the northern Persian Gulf, Dec. 7, 2004. File photo. U.S. Navy photo by Photographer’s Mate 1st Class Richard J. Brunson, public domain, via Wikimedia Commons.
Key numbers
- Rate now: 6% to 10% of hull value per voyage for tankers, according to brokers quoted by the Financial Times (reported Oct. 7). Insurance Business said on Oct. 14 that premiums were “back near their peak.”
- Before the war: 0.15% to 0.25% of hull value for seven days of cover in the Gulf (Lloyd’s List, March 11).
- Swings in 2026: about 1% in early March, quotes of 7.5% to 10% for high-risk ships by March 11, about 1% by March 27, about 2% after the June U.S.-Iran memorandum of understanding (MoU), 7.5% to 10% on July 22, and 3% to 8% in late August.
- Traffic: IMF PortWatch recorded an average of 3.4 ship transits a day from Sept. 12 to Oct. 11, compared with 68 a day in January and February. PortWatch counts only ships with their transponders on. The UK Maritime Trade Operations agency (UKMTO) counted 254 transits in the week to Oct. 16 and said traffic was about 70% below pre-war levels (see our report).
- Oil: Brent crude’s spot price was $126.55 a barrel on Oct. 14, up from $71.32 on Feb. 27 (U.S. Energy Information Administration).
- Losses: Broker Howden Re estimated $2 billion to $3 billion in claims across war, terror and political violence insurance, more than the $1.5 billion to $2 billion the line takes in worldwide in a typical year (Insurance Business, Aug. 26).
Hormuz war-risk premium quotes in 2026
Additional premium for one transit or 7-day stay, as a percentage of the ship's hull value. Bars show the range reported on each date; thin marks are single "about" figures. These are broker and press quotes, not an official index.
The quotes above are ranges from brokers, underwriters and trade press, not an official index. Every war-risk policy is priced separately. The price depends on the ship’s value, flag and owners, any links to the U.S., U.K. or Israel, where it is going and how long it stays. Lloyd’s List reported in March that ships seen as having U.S., British or Israeli links were being charged about three times as much as other ships.
How marine war-risk insurance works
A merchant ship usually carries three separate kinds of insurance. Each one pays for different losses, and only one of them covers acts of war.
- Hull and machinery (H&M) covers damage to the ship from ordinary marine risks such as collision, grounding, fire and heavy weather. Standard hull policies exclude war, so a missile or mine strike is not covered.
- Hull war insurance fills that gap. It covers the ship against war, mines, terrorism, seizure, strikes and riots. Institute War and Strikes Clauses, widely used in the London market, cover hostile acts by or against a warring nation and separately list stray mines and other weapons of war, Insurance Business reported.
- Protection and indemnity (P&I) covers the owner’s liability to others, including oil pollution, wreck removal, cargo damage and crew injury. Most of it is written by mutual shipowner clubs. War-related liabilities are covered under separate war P&I terms.
Cargo owners buy their own cargo and cargo-war insurance. That is a separate cost from the ship’s insurance.
Annual policy plus additional premiums. A shipowner usually buys an annual hull war policy, often for “hundreds of thousands of dollars,” Lloyd’s List explains. Underwriters can then charge an additional premium, or AP, each time the ship enters a high-risk area, usually for a set period such as seven days. Underwriters can charge as much as they think the risk calls for, and sometimes waive the AP for valued clients. This AP is the “war-risk premium” that headlines usually report, quoted as a percentage of the ship’s insured hull value.
The Joint War Committee’s listed areas. The Joint War Committee is made up of underwriters from the Lloyd’s Market Association (LMA) and the International Underwriting Association. It publishes a list of “Listed Areas.” Ships entering those waters must tell their insurers, who can then charge an AP. The committee does not set prices. Its circular JWLA-033, dated March 3, 2026, added Bahrain, Djibouti, Kuwait, Oman and Qatar to an area that already included Iran and much of the Gulf. As of mid-October, the listed areas still covered the entire Persian Gulf. Insurance Business reported that the committee wants sustained incident-free passage and verified mine clearance before it removes the listing.
Cancellation notices. War cover can be withdrawn quickly. Hull war policies typically include seven-day cancellation clauses, so terms can change in the middle of a voyage, Insurance Business noted. On March 1, P&I insurer Gard told members its reinsurers had cancelled war cover for Iran and the Gulf. Under a clause that requires at least 72 hours’ notice, Gard said its fixed-premium covers would exclude war risks in those waters from March 5. The cancellation did not affect excess war cover for ships with mutual P&I. Other clubs issued similar notices. The London market disputed reports that cover had disappeared. Chris Jones, head of the International Underwriting Association, said, according to Lloyd’s List: “Trade has been halted, not by a lack of available insurance, but by obvious safety concerns.”
Who writes the cover. Lloyd’s syndicates and London insurance companies write most of the world’s marine war business, an estimated 70% to 80%, according to gCaptain. Large risks are shared among several insurers, with a lead underwriter setting terms. “Everyone has to agree to a set of common rates,” said James Reason of broker WTW in a third-quarter 2026 market briefing.
How Hormuz rates have moved in 2026
Gulf war-risk premiums started the year low. Lloyd’s List said premiums for Middle East Gulf voyages were clustered between 0.15% and 0.25% before the strikes and had been softening, because the hull market had more capacity than it needed. During the 12-day Israel-Iran war in June 2025, rates for the Gulf had briefly doubled to about 0.5% from 0.2% to 0.3%, Reuters reported on June 23, 2025.
After the strikes on Feb. 28, prices rose quickly:
- March 6: Dylan Mortimer, Marsh’s U.K. hull war leader, put rates at roughly 1% to 1.5% of vessel value, and analysts at Jefferies cited a rate of 3%, Reuters reported.
- March 11: Lloyd’s List said Hormuz transits were fetching 2.5% in most cases and 5% for ships with U.S., U.K. or Israeli links. High-risk ships had been quoted 7.5% the day before, and underwriters expected 10% or more.
- March 16: Bloomberg reported cover at about 5% of a ship’s value.
- March 27: As more ships crossed, the rate fell back to close to 1% per seven days, and some tankers paid about 0.8% after no-claims discounts, S&P Global reported.
- June and July: Rates fell to about 2% after the June MoU, then rose to around 5% after three ships were attacked in early July, Xinhua reported on July 10, citing market estimates. On July 22, Marsh’s Marcus Baker told S&P Global that rates had risen to 7.5% to 10%, up from 1% to 3% a few weeks earlier.
- Aug. 26: Market estimates put Hormuz transits at 3% to 8%, Insurance Business reported.
- Early October: Brokers told the Financial Times that tanker premiums were 6% to 10%. At least 12 ships were hit in the seven days to Oct. 16, a new weekly record, according to UKMTO (our report).
Rates now change within a day or two of attacks. “There is a direct correlation between events in the preceding — we’re talking now 24 hours, 48 hours,” WTW’s Reason said. Neil Roberts, head of marine and aviation at the LMA, was quoted by Insurance Business as saying: “There was always and there remains sufficient capacity, with cover available for a price. That price reflects the risk.”
What a transit costs: worked examples
The basic formula is simple:
War-risk additional premium = insured hull value × AP rate
The examples below apply rates that brokers and trade press have reported. They are illustrations, not real policies. Actual premiums include discounts, surcharges and terms negotiated for each voyage.
| Ship and rate | Calculation | Premium |
|---|---|---|
| $100M tanker, pre-war rate (0.25%) | $100,000,000 × 0.0025 | $250,000 |
| $100M tanker, March 27 rate (1%) | $100,000,000 × 0.01 | $1,000,000 |
| $100M tanker, October low end (6%) | $100,000,000 × 0.06 | $6,000,000 |
| $100M tanker, October high end (10%) | $100,000,000 × 0.10 | $10,000,000 |
| $138M five-year-old VLCC* at 6% to 10% | $138,000,000 × 0.06 to 0.10 | $8.28M to $13.8M |
| $250M tanker at Jefferies’ 3% (March) | $250,000,000 × 0.03 | $7,500,000 |
*A VLCC (very large crude carrier) is a supertanker that can carry about 2 million barrels, Reuters has reported. Lloyd’s List valued a five-year-old VLCC at about $138 million on March 11.
What one Hormuz transit costs in war-risk premium
Premium at each quoted rate for a $100 million tanker and for a $138 million five-year-old VLCC (Lloyd's List valuation, March 11). Formula: hull value × rate.
Cost per barrel. Spread across a full VLCC cargo of about 2 million barrels, a $6 million to $10 million premium adds about $3 to $5 per barrel. The pre-war premium of $250,000 added about 12.5 cents. At 42 gallons per barrel, $3 to $5 is about 7 to 12 cents per gallon of crude oil. This is simple arithmetic. It is not a measure of what drivers pay at the pump, because refining, other shipping costs and market prices all come in between.
Cargo cover is extra. Paul Bradshaw of Emirates National Oil Company told Reuters on Sept. 9 that cargo insurance had reached “anywhere up to five, six percent” of cargo value. He said that “could be another $10 million on your cargo insurance,” and put total transit insurance costs at $10 million to $20 million. In some cases the premium has been larger than the freight. S&P Global reported a Suezmax tanker whose $7.5 million war premium in mid-March was more than its $6.5 million freight.
Who pays. Depending on the charter contract, the shipowner or the charterer pays the AP. In its March example of a VLCC chartered by U.S. interests, Lloyd’s List said a $10 million to $14 million premium would fall “to the charterer’s rather than owner’s account.”
Ship traffic and oil prices
In 2024, oil moving through Hormuz averaged 20 million barrels a day, about 20% of world oil consumption, according to the EIA. About a fifth of global liquefied natural gas trade also passed through the strait. The EIA estimates that 84% of the crude oil and condensate moving through Hormuz in 2024 went to Asia.
Ships through the Strait of Hormuz each day
Daily commercial transits recorded from ship-tracking signals, with a 7-day average and the Jan. 1 to Feb. 27, 2026 average. Ships crossing with transponders off are not counted, so recent figures understate traffic.
The ship counts differ depending on who is counting. PortWatch uses ship-tracking signals, and captains on many runs through the strait switch their transponders off, Al Jazeera reported. That is why PortWatch shows only a few transits a day, while UKMTO and other trackers report more. Analytics firm Windward counted 13 crossings on Oct. 4, against about 135 a day before the war. Using Kpler data, Insurance Business reported that crude exports through Hormuz averaged about 8.5 million barrels a day in the week to Oct. 12, nearly 40% below pre-war levels.
Brent crude oil spot price
Daily Europe Brent spot price, dollars per barrel. The red line marks Feb. 28, 2026. Spot prices for physical cargoes can differ from the Brent futures prices quoted in market news.
How Hormuz compares with the Red Sea and 2019
Red Sea vs. Hormuz: how war-risk premiums compare
Reported additional premium as a percentage of hull value at key moments. Navy bars are the Red Sea and Bab al-Mandab; red bars are the Gulf and Hormuz.
2019 tanker attacks. After tankers were attacked near Fujairah in May 2019 and in the Gulf of Oman on June 13, 2019, war-risk premiums for supertankers going to the Persian Gulf rose to at least $185,000 per trip, up from $50,000 after the May attacks, Bloomberg reported. The Joint War Committee had listed the entire Persian Gulf after the May incidents. Those 2019 figures were reported in dollars, not as a percentage of hull value, so they are not shown in the chart.
Red Sea, 2023 to 2026. After Houthi attacks began in November 2023, Red Sea premiums rose to 0.5% to 0.7% of a ship’s value by Dec. 18, up from 0.07% in early December, Reuters reported. They reached about 1% in January 2024, and Marsh said premiums reached as high as 2% for a single transit in September 2024. Brokers told S&P Global that in 2024 the Red Sea premium usually stayed between 0.4% and 0.7% and “rarely reached 1%.” After the Houthis sank two ships in July 2025, the rate jumped back to about 1% from 0.2% to 0.3%, Bloomberg reported. On July 22, 2026, Marsh put Bab al-Mandab transits at 0.5%.
Historical peak. During the 1980s Iran-Iraq “tanker war,” when the two countries attacked more than 450 ships, the typical rate was about 5%, Lloyd’s List noted. Hormuz quotes in 2026 have gone above that level more than once.
Effects on freight, crews and consumers
Freight rates. Freight rates for cargoes carried through the strait hit a record $1.3 million a day in early October, compared with about $20,000 to $50,000 a day last year, the Financial Times reported. The Wall Street Journal reported that ship-to-ship transfers in and out of the Gulf were costing $30 million to $40 million for a single round trip, according to Al Jazeera.
Crew pay. On March 5, the unions and shipowners in the International Bargaining Forum declared the Strait of Hormuz, Gulf of Oman and Persian Gulf a “Warlike Operations Area.” Seafarers on covered ships get a bonus equal to 100% of basic wage for at least five days, double death and disability compensation, and the right to refuse to sail there, with repatriation at company cost. The Financial Times reported that tanker captains, whose normal pay is about $15,000 a month, are being paid the equivalent of $100,000 a month plus a $50,000 bonus per trip. Ordinary sailors, who can earn as little as $1,500 a month, get at least four to six times their usual rate during each transit. In July, Bloomberg reported that Sinokor offered crews six months’ extra salary for a round trip.
Consumers. The average U.S. price of regular gasoline was $4.33 a gallon in the week of Oct. 12, up from $2.94 in the week of Feb. 23, according to the EIA. Insurance is only one part of that increase. Crude prices, refinery margins and lost supply play a bigger role. The United States imported about 0.5 million barrels a day of crude through Hormuz in 2024, about 7% of its crude imports, the EIA said. Asian importers are more exposed.
Government backstops
- United States: The U.S. International Development Finance Corporation (DFC) and Chubb set up a facility of up to $40 billion covering war hull, war P&I and cargo, with Travelers, Liberty Mutual, Berkshire Hathaway, AIG, Starr and CNA as reinsurers. It was designed to work alongside U.S. naval escorts and had written no business as of May. Insurance Business said on Oct. 14 that it could find no public update on whether the facility is writing policies. Read our explainer on the Chubb-DFC plan.
- India: On May 12, India’s Finance Ministry launched the $1.5 billion Bharat Maritime Insurance Pool with a $1.4 billion sovereign guarantee. It covers hull, cargo, P&I and war risks for Indian-flagged or Indian-controlled ships and ships sailing to or from India. Claims over $100 million fall to the guarantee only after the pool’s own resources are used up.
- South Korea: On May 21, the Financial Services Commission said 10 domestic non-life insurers would share war cover for 10 vessels of small and midsize Korean shipping companies waiting in the strait, as part of a support package of about 300 billion won ($214 million), Businesskorea reported.
Frequently asked questions
What is a war-risk premium?
It is an extra charge that hull war insurers can add when a ship enters an area listed as high risk. It is usually quoted as a percentage of the ship’s insured value for one transit or seven days.
How much does it cost to insure a ship through Hormuz now?
Brokers quoted 6% to 10% of hull value for tankers in early October 2026. That is $6 million to $10 million for a $100 million ship, before any cargo insurance.
Why do quotes vary so much?
Each policy is priced separately. Ships linked to the U.S., U.K. or Israel, ships going deep into the Gulf and ships crossing right after attacks pay more. Static ships far from the fighting and long-standing clients may pay less.
Is insurance unavailable?
No. Lloyd’s and London market groups say cover remains available at a price, and some P&I clubs withdrew only certain fixed-premium war covers. Many owners are staying away because of the danger to crews.
Does the Joint War Committee set the price?
No. It lists high-risk areas where ships must notify insurers. Each underwriter sets its own rate.
Is this worse than the Red Sea crisis?
By the reported numbers, yes. Red Sea premiums peaked at about 2% in 2024, while Hormuz quotes have reached 10% at several points in 2026.
Do higher premiums raise gas prices?
A little, directly. At 6% to 10%, the premium works out to about 7 to 12 cents per gallon of crude carried on a full supertanker. The bigger effects come from higher crude prices, freight rates and lost supply.
Will rates fall if a ceasefire holds?
They have before. Rates fell to about 1% in late March and about 2% after the June MoU. But Insurance Business reported that the Joint War Committee wants verified mine clearance and sustained safe passage before it removes the listing, and Red Sea premiums took months to follow a drop in attacks.
Related coverage
- Iran War Tracker: day count, oil, shipping and casualty charts
- Economics Hub: the U.S. and world economy, explained
- Strait of Hormuz Attacks Hit Record as Iran Claims Tanker Mine Strikes
- Container Ship GFS Pride Sinks in Strait of Hormuz
- Iran Strait of Hormuz Incidents: Tanker Attacks, Mine Claim, Rezaei Warning
- Shipping Costs US to Asia Surge: Who Is Profiting and Who Pays
Sources
- Lloyd’s List: Gulf war risk premiums topping double-digit millions of dollars per trip (March 11, 2026)
- Reuters via Insurance Journal: Maritime insurance premiums surge as Iran conflict widens (March 6, 2026)
- Bloomberg: Shipping insurance costs for Hormuz passage surge after vessel attacks (March 16, 2026)
- S&P Global: War risk insurance cost off highs but still elevated in Persian Gulf (March 30, 2026)
- Xinhua: War-risk insurance rates for Strait of Hormuz vessels rise amid renewed tensions (July 10, 2026)
- S&P Global: Middle East shipping insurance costs rise on Hormuz risks: Marsh (July 22, 2026)
- Insurance Business: Trump says Hormuz is clear. The insurance market disagrees (Aug. 26, 2026)
- Reuters: Oil vessel transit costs through Hormuz escalated after Iran war, ENOC exec says (Sept. 9, 2026)
- Financial Times: Ships’ captains paid $100,000 a month to transit Strait of Hormuz (October 2026); summarized by TradeWinds (Oct. 7, 2026)
- Al Jazeera: The Hormuz bonus: Sailor salaries soar for transits amid Iran war (Oct. 8, 2026)
- Insurance Business: Hormuz sinking hands marine war underwriters another total loss (Oct. 14, 2026)
- WTW: Global Insurance Marketplace Insights Q3 2026 – Marine (October 2026)
- Joint War Committee: Circular JWLA-033, Listed Areas (March 3, 2026)
- Gard: 01/2026 Notice of cancellation for war risks (March 1, 2026)
- gCaptain: What the Hormuz insurance crisis really means
- ITF and JNG: Designation of Warlike Operations Area in the Strait of Hormuz (March 5, 2026)
- Bloomberg: Shipowners offer six-month bonuses to crews crossing Hormuz oil route (July 20, 2026)
- Government of India (PIB): Bharat Maritime Insurance Pool launched (May 12, 2026)
- Businesskorea: Government backs war insurance for Hormuz ships (May 22, 2026)
- Reuters via Insurance Journal: Escalating Hormuz tensions drive up Middle East war risk insurance costs (June 23, 2025)
- Reuters via Insurance Journal: London marine insurers widen high risk zone in Red Sea (Dec. 18, 2023)
- Reuters via Insurance Journal: Red Sea war risk insurance rises with more ships in firing line (Jan. 16, 2024)
- Reuters via Maritime Logistics Professional: Red Sea insurance costs soar as Houthi shipping dangers loom (Sept. 19, 2024)
- Bloomberg via Insurance Journal: Red Sea insurance premium spikes as Houthi risks return (July 11, 2025)
- Bloomberg via gCaptain: War risk premiums surge after Gulf of Oman tanker attacks (June 14, 2019)
- EIA: Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint (June 16, 2025)
- EIA: Spot prices for crude oil and weekly retail gasoline prices
- IMF PortWatch: Strait of Hormuz daily transit calls
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