A framework ceasefire agreement between the United States and Iran, scheduled to be signed in Switzerland on Friday, has been widely reported as a potential turning point for global shipping. With around 700 fully loaded vessels currently stranded in the Gulf and a further 400 empty tankers waiting outside the Strait of Hormuz for permission to enter, the diplomatic news was welcomed by markets. Oil prices eased. Shipping stocks recovered ground. The assumption, in many headlines, was that trade could now resume.
London's marine war risk underwriters are considerably more cautious. The Greek maritime risk management agency BIMCO captured the mood precisely when it described the framework not as a restoration of normal trading conditions but as "the beginning of a de-escalation process." For the insurance market, that distinction matters enormously - and the gap between a ceasefire on paper and a transit deemed insurable at pre-war rates is wider than many outside the market appear to appreciate.
Before any commercial vessel sails through Hormuz with confidence, Iran must locate and clear the naval mines it deployed during the conflict. Maritime security experts cited by Reuters estimate the process could take 60 to 90 days even under cooperative conditions, using minesweepers, underwater drones and sonar. Some mines may have drifted from their original positions. Others may be difficult to detect. Independent observers will then need to verify the waterway is safe before the major shipping associations endorse a return to normal routing.
Jakob Larsen, chief safety and security officer at BIMCO, stated bluntly that Hormuz transits "right now would be very risky" and called for mine-free corridors to be formally established before commercial shipping resumes. That verification process has no diplomatic shortcut.
The scale of the repricing that has taken place since late February gives a sense of the challenge ahead. As Insurance Business UK reported in May, Howden Re data showed war risk pricing on Hormuz transits climbing from roughly 0.10–0.125% of vessel value before the conflict to around 2–3% by March - and independent estimates have since placed the range as high as 5% for some vessel types. For a typical $300 million tanker, that translates to a per-transit cost that has risen from under $400,000 to between $6 million and $15 million.
An unnamed underwriter based in Singapore told Lloyd's List that premiums were "quick to go up, slow to go down" - a formulation that reflects how the London market approaches post-conflict repricing. Underwriters will require sustained evidence of safe passage, a settled geopolitical picture and the formal removal of the Joint War Committee's Listed Area designation before rates begin any meaningful retreat. The JWC added Bahrain, Djibouti, Kuwait, Oman and Qatar to its listed areas in March; unwinding those designations requires a formal review process that operates on its own timetable.
Even beyond the mine-clearance timeline, the framework agreement leaves several structural tensions unresolved. The US is insisting on a permanently toll-free strait; Iranian officials have spoken publicly of "service fees" and retaining joint sovereignty with Oman over the waterway. Israel has stated it is not bound by the agreement and that it will continue to act in self-defence - a position that, in the context of the region, carries real consequences for how underwriters model the probability of further strikes. Neil Shearing, group chief economist at UK-based Capital Economics, projected on Monday that it would take until the end of September for around 80% of energy flows through Hormuz to resume - and warned that natural gas flows would be slower still, citing damage to Qatar's Ras Laffan liquefied natural gas hub, which lost approximately 15% of export capacity in the conflict.
The London market's position throughout the crisis has been consistently misrepresented. The Lloyd's Market Association issued a formal statement in March clarifying that war risk cover had remained available throughout, with 88% of key participants retaining appetite to underwrite hull war risks and more than 90% willing to write cargo. What changed was price and terms, not availability. That distinction will matter again as the market navigates a reopening: cover will be there for shipowners willing to pay for it. The question is how long it takes before the price becomes one that most of them are willing to accept.
