The Strait of Hormuz is now closed in every way that matters to a shipowner, and it was not mines that finished the job. Cancellation notices issued on March 1 by Gard, Skuld, NorthStandard, the London P&I Club and the American Club took effect on March 5, withdrawing war-risk cover extensions for Gulf waters on 72 hours' notice, according to reporting by Al Jazeera. A tanker without war-risk cover is, commercially speaking, a ship that cannot sail.
The withdrawal completes what amounts to an invisible blockade. Iran has not laid a declared minefield across the strait, and it has not needed to. A closure declaration, a widening pattern of attacks and a set of underwriting decisions have together achieved what a blockading fleet would once have been required to do.
A closure declared, then enforced
Ebrahim Jabari, a senior adviser to the IRGC commander-in-chief, publicly declared the strait closed on March 2 and warned that the force would "set those ships ablaze" if vessels attempted the passage, remarks reported by The Jerusalem Post. The traffic data matched the rhetoric: just after midnight on March 2 not a single tanker was broadcasting AIS inside the strait, according to analysis by the maritime intelligence firm Windward.
The attacks have continued, and their geography keeps widening. The US-flagged product tanker Stena Imperative was struck twice at Bahrain on March 2; fire followed, one port worker was killed and two people were injured, though the crew were unharmed. On March 3 the bulker Gold Oak and the tanker Libra Trader were damaged off Fujairah, and the Bahamas-flagged crude tanker Sonangol Namibe suffered a hull breach off Kuwait's Mubarak Al-Kabeer terminal, roughly 800 kilometers beyond the strait. On March 4 the Malta-flagged container ship Safeen Prestige was hit near the strait and abandoned by her crew. CENTCOM commander Admiral Brad Cooper said on March 3 that at least 17 Iranian naval vessels had been destroyed and that no Iranian warship was underway in the Gulf, the strait or the Gulf of Oman. The strikes on merchant shipping have continued from shore batteries and drones regardless.
The economics of uninsurable water
Where hull war-risk cover can still be found, quotes have reached about 1 percent of vessel value, roughly $1 million per voyage for a $100 million tanker against some $200,000 before the war, and a number of underwriters have declined to quote at all, per Al Jazeera. The Lloyd's Market Association has pushed back against the idea that insurers are the ones closing the strait, arguing in a statement that safety concerns rather than insurance availability are driving the collapse in traffic. On the water the distinction is academic. Around 150 ships were initially reported stranded in the vicinity of the strait, hundreds of tankers are holding at anchorages on both sides, and about 10 percent of the world's container fleet is affected across the Gulf and Red Sea combined.
Energy reprices the war
The commodity response has been immediate. Brent crude has climbed about 13 percent since the outbreak, European natural gas is up around 50 percent and Asian spot LNG has gained roughly 39 percent, according to figures cited by Al Jazeera. The channel at stake carried about 20 million barrels of oil a day before the fighting began, and the shutdown arrived within a day of the first strikes, faster than any previous disruption of the waterway. With the Red Sea also under renewed attack, both of the world's key shortcuts are impaired at once, and every day of closure transfers demand onto a tanker fleet that cannot stretch much further.
What comes next
Insurance has become the war's real front line, and the next moves belong to states as much as markets. If commercial cover stays withdrawn, pressure will grow on governments to stand behind marine war risk themselves, as they have in past conflicts. Watch whether any club restores cover at any price, whether charterers accept the handful of owners still willing to run the gauntlet, and whether the anchorage populations on either side of the strait begin to disperse toward the Cape. And watch the oil price. Brent has not traded above $100 in four years; with the strait sealed and cover gone, few in the market would now rule out that threshold being tested.
