Marine insurers are canceling war risk coverage for vessels and oil shipping rates are set to surge further after the widening Iran conflict left at least three tankers d
amaged, a seafarer killed and 150 ships stranded around the Strait of Hormuz.
Iran has responded to U.S. and Israeli strikes that began on Saturday with retaliatory attacks that have sharply increased risks to commercial shipping in the past 24 hours.
In the Strait of Hormuz and surrounding waters, at least 150 vessels including oil and liquefi
ed natural gas tankers had dropped anchor, shipping data showed on Sunday.
Typically, ships carrying oil equal to about one-fifth of global demand from Saudi Arabia, the Unite
d Arab Emirates, Iraq, Iran, and Kuwait sail through the Strait along with tankers hauling diesel, jet fuel, gasoline and other products.
The disruption sparked a 9% jump in global oil prices on Monday.
Insurers Cancel War Risk Cover
Companies including Gard, Skuld, NorthStandard, the London P&I Club and the American Club s
aid their cancellations would take effect from March 5, according to notices dated March 1 on their websites.
War risk cover will be excluded in Iranian waters, as well as the Gulf and adjacent waters, according to the notices.
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Skuld added in its notice that it was working on a buy-back option to reinstate cover.
Japan’s MS&AD Insurance Group told Reuters it had suspended underwriting of a range
of insurance policies covering war risks in the waters around Iran, Israel and neighboring countries.
Oil Shipping Costs to Rise Further
Meanwhile, costs of shipping oil from the Middle East to Asia – already at six-year highs – are
set to rise further as the widening Iran conflict is deterring shipowners from sending vessels to the
region, market sources and analysts said on Monday.
Spot shipping rates from the Middle East to Asia, more commonly known as TD3C DFRT-M
E-CN, are expected to extend gains, shipbrokers said. The benchmark has nearly tripled since the start of 2026.
Brokers pegged the spot rate for hiring a very large crude carrier on the key Middle East to China
route early in Asia on Monday about 4% higher than on Friday, near W225 on the Worldscale indu
stry measure or equivalent to at least $12 million.
