The ink on the US-Iran memorandum of understanding is barely dry. The "Islamabad Memorandum of Understanding between the United States of America and the Islamic Republic of Iran" - signed electronically by both presidents and in effect from Wednesday June 17, 2026 - commits both sides to a 60-day ceasefire, opens the Strait of Hormuz to commercial shipping without charge for the duration, and paves the way for technical negotiations on Iran's nuclear programme. President Trump declared the strait would reopen "permanently toll-free." It has certainly been portrayed as a significant diplomatic moment.
The war-risk insurance market is reading it differently.
Within 24 hours of Trump's announcement, Iran signalled that ships could still face charges beyond the 60-day window - not "tolls" (a term with clear illegal implications under Article 17 of the Law of the Sea Treaty, which guarantees innocent passage) but "fees for services provided." The distinction is, as one legal expert put it, "entirely semantic in commercial terms." Meanwhile, Israel has not stopped attacking Lebanon. The 2026 Lebanon war continues even as Israeli and Lebanese officials hold Washington talks - with Israeli forces conducting strikes near Beirut as recently as 3 June, and another proposed ceasefire on 1 June already under strain. And Iran has yet to publicly confirm the US version of the MOU text, with a physical copy of the document yet to be released by Tehran.
As Insurance Business has reported throughout this crisis, the London marine war-risk market has maintained a consistent and carefully calibrated position. A landmark US-Iran agreement may reopen the Strait of Hormuz, but marine insurers warn the crisis is far from over, with war-risk premiums still running as much as 30 times above pre-conflict levels. The MOU changes the operational picture. It does not change the risk architecture.
The MOU text is explicit on one point: Iran will provide safe passage to commercial shipping "with no charge" for 60 days while demining operations are undertaken during the first month. That is operationally material - there are estimated to be more than 530 cargo ships and tankers signalling west of Hormuz via AIS, with a further 200-plus dark vessels in the same waters, including approximately 50 VLCCs that have been stuck there since the closure began on 28 February.
What the MOU does not address is what happens on day 61.
Iran's establishment of the Persian Gulf Strait Authority in May - a government agency created specifically to manage "safe passage permits" - remains in place. In March, as this publication reported when the fee regime first emerged, Iran began charging vessels up to $2 million per transit, with Iranian lawmaker Alaeddin Boroujerdi describing the toll on state television as "reflecting Iran's strength." That infrastructure does not dissolve because a 60-day window has opened. Tehran's position, stated clearly since the MOU signing, is that it will define a new fee regime with Oman once the window closes. The US is insisting on a permanently toll-free strait. Both positions cannot simultaneously be correct, and the 60-day clock is running.
The post-window fee structure is actively contested. Marine intelligence firm Windward, in its executive briefing from Wednesday, found the current atmosphere "cautious rather than a rush, as insurers and owners work through the transition from a four-month blockade to a tentative restart." That is the market's considered response to a signed deal.
It is worth briefly revisiting how the war-risk insurance situation developed, because the narrative that took hold in March remains widely misunderstood - and understanding it correctly matters for reading where the market goes from here.
When US and Israeli forces launched strikes on Iranian targets on 28 February 2026, war-risk premiums surged fivefold within 48 hours, the Lloyd's Market Association's Joint War Committee redesignated the entire Arabian Gulf as a conflict zone under JWLA-033, and tanker traffic collapsed by more than 80% before Iran's physical blockade was formally declared. The story that spread - that marine insurers had abandoned the market - was, as Insurance Business’s investigation found, substantially wrong.
The LMA issued a formal correction in March: cover remained available throughout. As the market's own professionals put it, the real barrier to passage through the Strait of Hormuz was never the insurance market - it was a war. The Trump administration's $40 billion DFC reinsurance facility, led by Chubb, was built on the premise that insurance availability was the problem. It attracted zero takers from the shipping industry - because it was solving the wrong problem.
What did change was price, and the change was severe. By early March, premiums for Strait of Hormuz transits had risen to between 1.5% and 3% of hull value, with US, UK and Israeli-linked vessels paying closer to 5%. For a Very Large Crude Carrier valued at around $138 million, that translated to indicative voyage premiums of between $10 million and $14 million per trip - against a pre-war baseline measured in hundreds of thousands of dollars. David Smith, head of marine at broker McGill and Partners, confirmed to Insurance Business UK that premiums in the worst period rose to between 3.5% and 7.5% of hull value, compared with 0.25% before the war.
The insurance market's position on the MOU is already crystallised, and it matches the pattern of every previous ceasefire in this crisis.
As Insurance Business reported in April, when the first ceasefire brought partial, brief relief: "A ceasefire won't reopen the insurance market - not yet." The Lloyd's Joint War Committee's listed area designations are not removed on the basis of political agreements. They are removed on the basis of demonstrated, sustained improvement in operational conditions. The committee's position has been consistent throughout: the JWLA-033 designation - covering Bahrain, Djibouti, Kuwait, Oman, Qatar and the broader Persian Gulf, Gulf of Oman, Indian Ocean, Gulf of Aden and Southern Red Sea - remains in place today.
Calvin Gray, global head of marine at Intact Insurance, made the market's operational logic explicit in his comments to this publication on the previous ceasefire: "The Strait may be officially open, but we are far from seeing normality restored. Capacity remains available, but it will be deployed selectively, based on real-time assessments of risk rather than political announcements." That judgment applies with equal force today.
The structural reason for this was identified clearly in our analysis of why the peace deal won't quickly unwind London's Hormuz war-risk premium: an unnamed Singapore-based underwriter told Lloyd's List that premiums are "quick to go up, slow to go down" - a formulation that precisely reflects how actuarial pricing resets after conflict. Underwriters require sustained evidence of safe passage, a settled geopolitical picture, and the formal removal of JWC listed-area designations before rates retreat meaningfully. Neil Shearing, group chief economist at 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, with Qatar's Ras Laffan LNG hub having lost approximately 15% of export capacity in the conflict.
Howden Re's view, expressed in its March assessment and not revisited since, was that Red Sea (2024–25) and Hormuz (2026) together represent a permanent structural repricing - a new baseline for marine war risk, not a temporary spike. The MOU does not change that assessment.
The most significant near-term threat to the MOU's durability is not Iran's fee ambitions. It is Israel.
The 2026 Lebanon war - which began on March 2 after Hezbollah fired rockets at Israel following the killing of Iranian Supreme Leader Ali Khamenei - has continued regardless of every ceasefire arrangement applied to the Iran front. Israel's position has been consistent: the US-Iran ceasefire does not apply to Lebanese operations. The US has not formally contradicted this. The result has been a cycle in which diplomatic progress on the Iran front is repeatedly complicated by kinetic action in Lebanon that Iran characterises as a violation.
The starkest example: on April 8, hours after the Iran war ceasefire was announced, Israel launched what it described as its most powerful attacks on Lebanon, killing at least 357 people. Iran, Pakistan, and Hezbollah characterised this as a direct ceasefire breach. The US and Israel maintained Lebanon was a separate theatre.
That dynamic is unchanged today. As of this week, Israel and Lebanon are due to hold another round of Washington talks on June 22. Hezbollah has been excluded from those talks. Israeli forces remain in Lebanon and are continuing operations. A ceasefire arrangement from June 1 - under which Israel committed not to target Beirut's southern suburbs - is being tested. Any serious escalation in Lebanon involving Iranian-backed forces creates the conditions for a rapid reassessment of JWC designations and a return to the premium levels seen at the crisis peak.
For underwriters pricing seven-day renewable contracts on Hormuz transits, that is not a theoretical concern. It is the variable they are repricing every week.
Iran's insistence on distinguishing "tolls" from "fees for services" is more consequential than it may appear. The establishment of the Persian Gulf Strait Authority - with a mandate to issue safe passage permits - represents a structural change in how the world's most important energy chokepoint operates.
Even in peacetime, that changes the risk architecture underwriters are pricing. As this publication explored when Iranian shipping charges first emerged, the pattern of Iran using commercial market logic - rather than direct military action - to assert control over the strait has been a defining feature of this crisis from the start. The Irregular Warfare Journal's May analysis described Iran's strategy precisely: attack a statistically small number of vessels to generate sufficient claims data to trigger JWC reclassification, effectively closing the strait through private market logic without a formal blockade.
The fee regime, if established post-day 60, is the peacetime continuation of that strategy. It maintains Iranian leverage over the waterway without requiring kinetic action. It creates a cost variable - payable in cash, cryptocurrency or barter, as the IRGC was accepting during the crisis - that did not exist in the pre-war world. Whether that cost is classified as a "toll" (illegal under UNCLOS) or a "service fee" (legally ambiguous) matters enormously for the diplomatic picture. For marine underwriters, it matters less: either way, it is a new variable in the risk model for every Hormuz transit.
Wood Mackenzie has warned that the closure of the strait removed more than 80 million tonnes per annum of LNG supply from global markets - roughly 20% of worldwide supply - and that prolonged disruption could reshape energy markets, investment decisions and global supply chains for years.
For marine insurers, P&I clubs, reinsurers, shipowners and brokers, the next 60 days present a specific set of indicators worth tracking closely.
Vessel transit data. Windward is tracking visible AIS transits plus estimated dark transits through Hormuz. In the June 1–7 window, 51 transits were recorded, 27% dark. As vessels begin to move, the market will watch for safe, consistent, incident-free passage. Two or three weeks of clean data will begin to influence underwriter appetite. A single significant incident would reset the clock.
The Lebanon talks on June 22. This is the most immediate diplomatic variable. Hezbollah's exclusion from the Washington process is a problem: as our coverage of the 100-day Lebanon war has documented, previous ceasefire arrangements have consistently broken down because the military actors on the ground are not party to the agreements being signed in Washington. Any breakdown that triggers Iranian retaliation - particularly involving IRGC-linked forces - reactivates the risk logic that drove premiums to their March peaks.
The Persian Gulf Strait Authority's post-60-day announcement. Tehran has committed to toll-free passage during the MOU window. After day 60, it has signalled it will define a new fee regime with Oman. The legal and commercial implications of how that regime is framed - and whether the US treats it as a violation of its "permanently toll-free" position - will be central to how underwriters approach cover renewals in August and September.
JWC Listed Area amendment. This is the most meaningful single indicator for premium normalisation. The committee does not amend on the basis of political developments; it amends on operational grounds. Removal of the Persian Gulf and adjacent waters from the JWLA-033 designation would be the signal that the market has returned to something approaching pre-conflict conditions. At current trajectory, that is a months-long process, not a weeks-long one.
Reinsurance renewals. The losses incurred during the four-month crisis - at least 17 merchant ships damaged, seafarers killed, vessels captured - will feed into reinsurance renewal discussions in the second half of the year. As the Gulf shipping crisis was already causing significant strain on Lloyd's well before the MOU, the reinsurance cycle repricing will eventually reach end-customers through elevated marine insurance premiums across the board - not just on Gulf routes.
The US-Iran MOU is the most significant positive development in the Strait of Hormuz crisis since it began on 28 February. The 60-day toll-free transit window gives the market the operational breathing space it has needed since the closure began. Vessels that have been at anchor for four months are starting their engines. That matters.
But the London marine war-risk market has been consistent throughout this crisis, and it is consistent now. As our coverage since the first day of the conflict has documented, the market did not reprice because of a bad week. It repriced because Iran demonstrated, conclusively, that it is willing and able to close the world's most critical energy chokepoint - and that a limited kinetic action can trigger a commercial cascade through the interlocking JWC, P&I and reinsurance systems that undergird global trade.
A 14-point memorandum does not undo that demonstration. It provides a 60-day window in which normal transit is conditionally restored. It does not remove the Persian Gulf Strait Authority, resolve the Israel-Lebanon front, settle the fee question, or persuade the JWC to amend JWLA-033. What war-risk insurers have said consistently from April through to today remains operative: the market is at the beginning of a long process of normalisation, not its end.
The deal is signed. The risk is still being priced.
