Iran’s Revolutionary Guards launched missile and drone attacks on US military bases in Jordan, Kuwait, and Bahrain on Wednesday, after American forces struck Iranian targets around the Strait of Hormuz.
The exchanges mark one of the largest escalations between Tehran and Washington since the two sides reached a ceasefire in April.
The US military said its strikes hit nearly 20 Iranian targets, including air defense systems, ground control stations, and surveillance radar sites.
Washington said the action was a direct response to Iran’s downing of a US Army Apache helicopter on Tuesday.
“I believe the response should be very strong, very powerful, and that’s what this one is,” President Donald Trump told ABC News.
The military exchanges landed hard on a marine war risk market already under severe pressure. War risk premiums for Hormuz transits had already climbed from roughly 0.15% to 0.25% of hull value to as high as 10% following the Apache helicopter incident.
Global oil trade flows through the strait were also down 62%, according to a May 2026 Howden Re report. The same report estimated the conflict could generate $2 billion to $3 billion in market-wide claims for the war, terror, and political violence segment. This figure exceeds the segment’s estimated annual global premium volume of $1.5 billion to $2 billion.
Specialty insurers had reported manageable losses through the first quarter, but Wednesday’s strikes may change the picture.
A Morningstar DBRS report found specialty underwriters bore the brunt of direct losses, with Munich Re disclosing approximately $106 million (€90 million) in Iran war claims.
Lloyd’s said in a May 14 market message that it did not expect the conflict to become a capital event. This statement came before Iran struck US military bases across three Gulf states in one night.
Iran’s Revolutionary Guards targeted four sites at the US al-Azraq base in Jordan with long-range missiles, including F-35 hangars and the command and control center. Jordan intercepted five of those missiles, with debris falling on Jordanian territory but causing no injuries.
The Guards also attacked the US Fifth Fleet in Bahrain with drones and targeted the Ali Al Salem air base in Kuwait. A US official said the country intercepted nearly all Iranian missiles and drones and was not aware of any harm to US personnel.
Iran’s Foreign Minister Abbas Araqchi posted on X that Iran would “leave no attack or threat unanswered” and urged the US to “leave our region.”
Iran’s state media reported strikes on Qeshm island and the port city of Sirik in the strait, with explosions also heard near Bandar Abbas and Jask county.
The Trump administration’s $40 billion maritime reinsurance facility, backed by Chubb, AIG, Berkshire Hathaway, Travelers, Liberty Mutual, and Starr, has drawn no uptake. Not a single vessel has transited under the program.
Market professionals say Washington misread the problem as one of insurance availability. The market says the problem is a war.
This distinction matters more after Wednesday. The Lloyd’s Joint War Committee’s high-risk designation for the Arabian Gulf will not be removed until the committee judges the threat to have materially diminished.
Red Sea war risk premiums surged 20-fold in early 2024 and stayed elevated well into 2026 despite a significant drop in attacks. With the April ceasefire now in tatters, underwriters have little reason to expect a faster recovery in Hormuz pricing.
Brent crude rose 0.9% to $92.29 a barrel in early Asian trade on Wednesday. West Texas Intermediate climbed 0.8% to $88.97. Asian equity markets fell, with Japan’s Nikkei down 0.9% and South Korea’s KOSPI down 2%.
