London war-risk underwriters decide the price for Hormuz passage amid conflicting US-Iran claims

Seventy-three tankers crossed the Strait of Hormuz between August 10 and 16, down from ninety-one the week before, most of them crude carriers moving through water both governments claim is shut. Lloyd's List Intelligence counted them for its August 19 report.

Washington insists there are no negotiations with Iran over the strait, and Tehran insists reopening depends entirely on American concessions. Yet the ships keep sailing anyway. The contradiction resolves in one place only — the desk of a London war-risk underwriter deciding what percentage of a hull's value one passage through twenty-one miles of water is worth.

Donald Trump said on Tuesday that no talks are underway, leaving the strait "in limbo" while high pump prices bleed into November politics. Bloomberg carried his remarks via gCaptain on August 18.

Iran's Revolutionary Guard stated flatly that reopening has nothing to do with the Oman channel and depends on Washington lifting its naval blockade of Iranian ports and paying war damages, Tasnim reported on August 8.

Oman is brokering a sixty-day interim framework, and Qatar reports the two sides have reached the technical stage, agreeing shipping-route coordinates. Doha also noted that only six vessels crossed on Monday against roughly 130 to 140 before the war (Euronews, Aug 11).

The price of a passage

The Washington Post

Underwriters in the London market price Hormuz transits per voyage as a share of insured hull value, negotiated case by case since the crisis began in February, with indicative quotes running from about one percent of a vessel's value early in the crisis toward multiples higher as attacks continued (Reuters, March 2026).

By July, cover for a single Strait transit had reached ten to fourteen million dollars, and insurers told Lloyd's List the danger to crews was what kept ships from sailing; the wire service's report ran via TheOpsCon on July 17. Then came the truce. Quotes eased briefly, but the market never restored its pre-crisis designation. When the July ceasefire collapsed, the premium went straight back up. So the reopening price is quoted in pounds, cleared through Lloyd's syndicates, and reset weekly by people who have never set foot in the Gulf.

The trigger this month was the death of the June memorandum and a bulker struck this week that killed one seafarer, an attack no group has claimed, alongside the reported seizure of an Emirati-affiliated tanker near Qeshm Island — all of it documented in Lloyd's List Intelligence's August 19 report. The pressure underneath is older. Since late February, every round of escalation has taught underwriters that a ceasefire in this theatre can end without warning. Premiums do not fall when diplomats speak. They fall when a full season passes without a hull being hit. No season has.

In the Tanker War of 1984 to 1988, Kuwait's tankers kept the flow alive by taking American flags and naval escorts under Operation Earnest Will, effectively making Washington the guarantor of last resort. This time the state that could play that role is instead running a blockade of Iranian ports. Central Command says the blockade has redirected sixty-four merchant vessels, disabled three and boarded two — figures US CentCom released and Lloyd's List Intelligence cited on August 19.

The escorts of the 1980s worked because the threat was identifiable Iranian gunboats, whereas today's threat includes shore-based missiles and unclaimed strikes, which no flag can deter. Neither government can manufacture insurability by decree.

The ships buy their own way around

DP World is spending about one hundred million dollars a month keeping Jebel Ali container terminal ready for a reopening that may not come, while throughput there runs at roughly a tenth of normal levels and cargo reroutes through Fujairah, Khor Fakkan and a land bridge through Saudi Arabia. Lloyd's List Intelligence reported all of it on August 19.

Adnoc Logistics has bought six very large crude carriers and five very large gas carriers for a combined 1.3 billion dollars, paying above-market prices for secondhand tonnage, because owning ships that can cross the strait now beats chartering them. Here too the source is Lloyd's List Intelligence, August 19. National oil companies are converting transport capacity into strategic inventory.

The profiting side includes the willing and the shadowy alike. Freight earnings on the Middle East Gulf to China crude route have blown past half a million dollars a day, the strongest gains concentrated on voyages exposed to Hormuz, even as total oil exports fall. At least thirty non-sanctioned shadow-fleet tankers and gas carriers have lifted compliant cargoes since the conflict began, including five VLCCs, filling the gap left by owners who withdrew their tonnage. Both figures come from Lloyd's List Intelligence's August 19 reporting. Right now the discount for courage runs into seven figures per voyage.

Who pays lands downstream, in Asian refinery margins and in American fuel prices, both already visible in crude holding near ninety-three dollars a barrel, as Al Jazeera noted on August 20. Every dollar of war-risk premium and every day of depressed transits tightens physical supply, and the freight bill rides on top. Brent futures settled near $91.47 as markets weighed the stalled talks, The Daily Star reported on August 20.

Transits should recover before politicians announce anything, because shipowners test the water first and premiums follow the quiet weeks. Confirmation would be a sustained climb in weekly transits above the hundred mark without new strikes, dragging quotes down within days. Another unclaimed strike on a laden tanker breaks it, resetting the premium instantly regardless of any communiqué from Muscat.

Sovereignty over Hormuz was always partly fictional, and this war has exposed it. The strait belongs to whoever will underwrite the crossing, and today that is a handful of Lloyd's syndicates repricing courage once a week.