The fragility of the US-Iran ‘ceasefire’ was on full display earlier today, Memorial Day in the United States, as American forces conducted fresh strikes in southern Iran even as President Donald Trump stood at Arlington National Cemetery to honour the 13 service members killed during Operation Epic Fury, and diplomats in the region edged, haltingly, toward what some officials have cautiously described as a possible framework for peace.
US Central Command confirmed the strikes in a statement by spokesman Captain Timothy Hawkins. "U.S. forces conducted self-defense strikes in southern Iran today to protect our troops from threats posed by Iranian forces," Hawkins said. "Targets included missile launch sites and Iranian boats attempting to emplace mines. U.S. Central Command continues to defend our forces while using restraint during the ongoing ceasefire."
The strikes were carried out in the vicinity of Bandar Abbas — the home of Iran's principal naval installation and a focal point of the months-long standoff over the Strait of Hormuz, the narrow passage through which roughly 20 per cent of the world's seaborne oil supply normally flows.
For insurance professionals, the question of whether "restraint" and "self-defence strikes" are compatible concepts within a functioning ceasefire is not merely semantic. It goes directly to the actuarial problem that has defined the marine insurance market since the conflict erupted on 28 February.
When US and Israeli forces launched coordinated strikes on Iran on 28 February — a campaign that included the assassination of Supreme Leader Ali Khamenei and targeted Iran's nuclear and missile infrastructure — the Strait of Hormuz effectively closed before Iran's Revolutionary Guard Corps had laid a single mine. Within 48 hours of those initial strikes, war risk premiums surged fivefold, major marine insurers cancelled existing coverage, and the Lloyd's Market Association's Joint War Committee redesignated the entire Arabian Gulf as a conflict zone. Tanker traffic collapsed by more than 80 per cent before Iran's physical blockade was even formally declared.
The market response that followed has been widely mischaracterised, as Insurance Business Australia has reported. Three weeks into the conflict, the Lloyd's Market Association issued a formal market statement pushing back on the prevailing narrative. "Three weeks since the start of the hostilities in the Middle East, we are still seeing reports that suggest insurance coverage is cancelled or unaffordable and that this is the reason that vessels are not transiting the Strait of Hormuz," the LMA stated. "This is not accurate." A survey of key Lloyd's market participants found that 88 per cent continued to have appetite to underwrite international hull war risks, and over 90 per cent continued to offer cargo coverage. What had changed was not availability but price — and the price change was severe.
By early March, premiums for Strait of Hormuz transits had risen to between 1.5 and 3 per cent of hull value, with US, UK and Israeli-linked vessels paying closer to 5 per cent. For a Very Large Crude Carrier valued at around US$138 million, that translates to indicative voyage premiums of between US$10 million and US$14 million per trip — against a pre-war baseline measured in hundreds of thousands of dollars. Calvin Gray, global head of marine at Intact Insurance, told Insurance Business that even with the ceasefire nominally in place, "the Strait may be officially open, but we are far from seeing normality restored."
Monday's fresh strikes do nothing to change that assessment. The LMA's formal position — that ships are not transiting because of crew and vessel safety concerns, not because of an absence of insurance — remains the operative explanation. But safety concerns are, by definition, responsive to actual events on the water, and what happened near Bandar Abbas on Monday — American forces targeting Iranian boats in the process of emplacing mines — is precisely the kind of event that feeds those concerns.
A further complication for underwriters is Tehran's launch of "Hormuz Safe," a state-backed digital insurance platform accepting cryptocurrency payments for vessels transiting the strait under Iran's newly declared Persian Gulf Strait Authority. Insurance Business Australia has reported in detail on the scheme's implications for Australian brokers advising clients with Gulf exposure, noting that coverage through a sanctioned state entity raises serious questions about policy validity, sanctions compliance and enforcement. The US government, meanwhile, has stepped in to backstop war-risk coverage for compliant vessels through its own programme — though a separate Insurance Business Australia investigation found the programme had attracted zero takers, in part because it requires structural conditions the market says do not match the actual insurance problem.
The strikes came at a delicate point in the peace process. Talks mediated by Pakistan stalled in April without agreement, but US officials had in recent days indicated progress toward an interim framework. Trump on Monday posted a significant shift in position on the question of Iran's enriched uranium — long the central obstacle. Rather than his earlier insistence that all nuclear material be physically transferred to American custody, Trump posted on Truth Social that the uranium "will either be immediately turned over to the United States to be brought home and destroyed or, preferably, in conjunction and coordination with the Islamic Republic of Iran, destroyed in place or, at another acceptable location, with the Atomic Energy Commission, or its equivalent, being witness to this process and event."
The shift is meaningful: Trump had previously stated flatly that the US would "get all Nuclear 'Dust'" and that "no money will exchange hands in any way, shape, or form." Monday's post, while maintaining the demand for destruction, introduces a degree of geographical flexibility that Iranian negotiators had reportedly sought.
Iran's foreign ministry spokesperson Esmaeil Baghaei struck a measured tone, saying the country remained "focused on the negotiation process" and that questions about how any understanding would eventually be formalised were matters for future discussion. He stopped short of the more categorical language he had used in April, when he had said there was "no plan for a second round of negotiations."
The broader regional picture, however, remained unsettled. Israeli Prime Minister Benjamin Netanyahu on Monday ordered the IDF to "intensify" operations against Hezbollah in Lebanon. "We are not taking our foot off the gas," Netanyahu said in a video statement. "On the contrary, I have instructed them to press the pedal even harder. What is required from us now is to intensify the blows, increase the force." The IDF said it struck more than 70 Hezbollah infrastructure sites across Lebanon on the same day, an escalation that extends the geographic footprint of the conflict well beyond the direct US-Iran theatre.
The ceasefire has never really been a ceasefire in the conventional sense. Since 8 April, US and Iranian forces have exchanged fire multiple times: in early May, US forces struck Iranian military facilities responsible for attacks on American warships in the strait. Monday's strikes follow that pattern. The question for marine underwriters is not whether hostilities have formally resumed — both sides insist the ceasefire technically remains in place — but whether the pattern of ongoing kinetic incidents within a nominal ceasefire represents a risk environment that pricing models can adequately capture.
Industry analysts expect the Strait of Hormuz to carry a lasting risk premium for years to come, regardless of how the current diplomatic process resolves. "The war demonstrated, in ways that decades of theoretical concern had not, that the strait could be closed. That knowledge is now priced into every future actuarial model.”
For Australian brokers and underwriters with clients in the energy, resources, bulk shipping or commodities sectors, the operational implications are concrete. Cover remains technically available through the London market for Hormuz transits, but voyage-by-voyage placement at elevated premiums, with the full reinsurance chain requiring individual renegotiation, means that any resumption of normal shipping flows through the strait is a financial and logistical undertaking — not simply a function of whether the guns fall silent.
Monday's events suggest the guns have not.
