Iran struck two oil tankers in the Strait of Hormuz earlier today as they attempted to transit under United States naval escort, according to Iran's Revolutionary Guard, and four other vessels changed course rather than risk the same fate. President Trump has summoned his cabinet to Camp David today to weigh next steps in a war now in its sixth month.
Neither American nor British maritime security monitors had independently confirmed the strikes as of this morning, and US Central Command has disputed suggestions that Iran controls the waterway. The oil market treated the reports as credible regardless: Brent crude rose toward $89.90 a barrel and West Texas Intermediate approached $84.40, extending a rally that briefly pushed Brent above $90 earlier this week after Mr. Trump said the United States would respond forcefully to an attack that killed American service members.
For the marine war-risk insurance market, the strikes arrive at a delicate moment. Rates had only recently begun to soften.
War-risk premiums for a Hormuz transit had eased from a crisis peak of roughly 10 percent of a vessel's hull value to a range of about 3 to 8 percent, according to Dylan Saunders-Mortimer, Marsh's UK war leader. That is still nearly 4,000 percent above the roughly 0.25 percent baseline that applied before the war began on Feb. 28. Other broker estimates from the same period put the additional premium as high as 7.5 to 10 percent. The spread between those figures shows how fast conditions have been moving.
Premiums rise sharply after an attack and decline only gradually, if at all, according to analysts tracking the market. Neil Roberts, the head of marine and aviation at the Lloyd's Market Association, told the newswire Xinhua this month that rates have moved in step with risk. A memorandum of understanding between Washington and Tehran signed in June had briefly cooled the market before this week's attacks reversed that trend.
Washington's response to the crisis went beyond diplomacy. After premiums first spiked in late February, Mr. Trump directed the US International Development Finance Corporation to establish a maritime reinsurance facility intended to keep American-linked shipping moving through the strait. The program launched at $20 billion in March and was expanded to $40 billion within weeks, with Chubb as lead underwriter alongside AIG, Berkshire Hathaway, Travelers, Liberty Mutual and Starr.
The facility had written no policies as of May. Brokers cited in that reporting said the reason was straightforward: shipowners were not avoiding the strait because coverage was unavailable. The Lloyd's Market Association said as much publicly three weeks into the conflict, stating that capacity had never left the market and that only pricing had changed. Owners and captains, brokers said, were judging the physical risk to crews too high to sail. A federal reinsurance facility can absorb losses. It cannot make a war zone safe to sail through, and that gap is what the DFC program has been unable to close.
The exposure extends well beyond individual vessels. The Joint War Committee, the Lloyd's body responsible for designating high-risk maritime zones, has classified the entire Persian Gulf at its highest risk level since the war's earliest days, and that designation is now producing losses for reinsurers across hull, cargo, energy infrastructure and political violence lines simultaneously, a pattern analysts at Howden Re have described as a rare multiline event straining several segments of the reinsurance market at once.
Iran has also said it intends to operate its own toll regime for the strait through an entity it calls the Persian Gulf Strait Authority, which the US Treasury's Office of Foreign Assets Control has already sanctioned. Until that dispute is resolved, underwriters on both sides of the Atlantic have little basis to treat any ceasefire announcement as a durable change in risk instead of a pause between incidents.
For American insurers and brokers with marine, energy or trade-credit exposure in the Gulf, five months of this conflict have produced a consistent pattern: premiums spike immediately after an incident and fall only once there is sustained evidence that it was isolated. Today's attacks arrived just as pricing had begun to stabilize, repeating that same cycle.
Domestic politics adds to the uncertainty. A Reuters/Ipsos poll released this week found that just one in three Americans support the war, the lowest reading since fighting began. The Senate fell one vote short, 49 to 50, of advancing a resolution against the conflict on Thursday. With midterm elections approaching and gasoline prices remaining a concern for voters, the administration is under pressure to show progress. That could point toward renewed diplomacy or toward further military action, as Mr. Trump suggested earlier this week. Brokers said clients with Gulf exposure should treat any forthcoming ceasefire announcement with the same caution underwriters are already applying: a development worth monitoring, not yet a basis for repricing risk.
