Insurance Turmoil in the Strait of Hormuz Could Ripple Into U.S. Energy Prices

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

The next jump in gasoline prices might not start at an oil well or a refinery.

It could start in the insurance market.

The change isn’t happening on the water. It’s happening in insurance offices. Marine insurers have started canceling or sharply increasing the cost of war-risk coverage for ships operating in the Persian Gulf as tensions involving Iran grow. It may sound like a technical insurance decision, but for shipping companies it can determine whether a tanker sails or waits.

When coverage disappears — or becomes too expensive — ships often wait.

And some already are.

Shipping reports indicate vessels have slowed or anchored near the Strait of Hormuz while insurers review the risks and shipowners decide whether the voyage is still economically viable.

That hesitation is unfolding in one of the world’s most important energy corridors.

The route for Gulf oil exports runs through the Strait of Hormuz.

Strait of Hormuz between the Persian Gulf and Gulf of Oman

That geography is why even small disruptions can rattle markets. As Reuters has noted in reporting on maritime risk, war-risk insurance is often a critical requirement for vessels operating in conflict zones. When that coverage tightens or disappears, voyages can quickly become uneconomic.

In other words, the issue isn’t just military risk.

It’s financial risk.

And when the cost of moving oil rises — or ships pause altogether — energy markets tend to respond.

Infographic explaining how rising conflict risk in the Persian Gulf can push insurers to withdraw war-risk coverage, slowing tanker traffic and driving up energy costs.

That dynamic helps explain why developments inside the maritime insurance market are now drawing attention far beyond the shipping industry, including in Washington.

This week the official White House account on X shared a post from President Donald Trump’s Truth Social account outlining a federal response intended to keep ships moving through the region.

“The U.S. Development Finance Corporation will provide political risk insurance and financial guarantees for ships operating in the Persian Gulf,” Trump wrote.

He added that the goal is to ensure “the free flow of energy and commerce continues through the Strait of Hormuz.”

Trump also wrote that the United States will work with partners to “ensure freedom of navigation and the continued movement of global energy supplies.”

"Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade… If necessary, the United States Navy will begin… pic.twitter.com/pIJyFwL78j

— The White House (@WhiteHouse) March 3, 2026

The message signals that Washington may be prepared to step in if disruptions in the private insurance market begin slowing commercial traffic through the Gulf.

Insurance Companies Begin Pulling Back

Several maritime insurers have already issued cancellation notices for war-risk coverage tied to voyages in and around the Persian Gulf, according to reporting from the maritime outlet gCaptain.

War-risk policies cover losses tied to armed conflict, including missile strikes, mines, drone attacks or the seizure of vessels.

Among insurers reportedly issuing cancellation notices are several large Protection and Indemnity insurers, commonly called P&I clubs, including Gard, Skuld, NorthStandard, the London P&I Club and the American Club.

For shipowners, the insurance notices trigger a quick decision: find replacement coverage — usually at far higher premiums — or reconsider the trip entirely.

At the same time, London’s Joint War Committee has moved to widen the map of waters considered high risk for commercial shipping. The panel, which tracks maritime conflict exposure for insurers, recently expanded listed areas around the Gulf as tensions increased.

Geography leaves tankers with few alternatives. 

Ships Begin to Wait

Shipping traffic near the Strait of Hormuz is starting to slow.

Maritime industry reports indicate that dozens of vessels — about 150 by some estimates — have paused near the strait as insurers review the risks and shipowners reconsider their voyages.

In a corridor that carries such a large share of the world’s energy supplies, even a temporary slowdown can catch the attention of oil markets.

Insurance costs for those voyages have climbed sharply.

War-risk premiums for ships entering the region have reportedly increased severalfold in recent days. For tankers carrying cargo worth tens or even hundreds of millions of dollars, the additional insurance cost alone can run into the millions per trip.

Those costs rarely stay confined to the shipping industry.

They ripple outward.

Freight rates rise. Energy markets react. Fuel prices move.

And eventually, consumers feel it.

Why Insurance Can Stop a Ship

To someone outside the maritime industry, it may seem strange that insurance can slow global trade.

After all, a ship can physically sail whether it is insured or not.

But modern shipping involves a long chain of financial agreements.

Banks financing cargo require coverage. Chartering companies require it. Ports often require it as well.

Without valid insurance, a voyage can quickly become impossible.

So ships wait.

The result is something close to an invisible brake on trade. The sea lane remains open. No navy closes the waterway. But commercial traffic slows anyway.

How the Marine Insurance System Works

Much of the world’s maritime insurance system operates through a network of insurers and brokers centered in London.

One key part of that system is the network of Protection and Indemnity clubs — mutual insurers that cover liabilities faced by shipowners, including cargo damage, environmental pollution, crew injuries and collisions.

Together those clubs insure thousands of vessels through the International Group of P&I Clubs, which pools risk across the global shipping industry.

War-related risks are typically handled separately.

Standard marine insurance policies exclude losses caused by armed conflict. In dangerous waters, ships typically carry separate war-risk insurance designed to cover threats such as missile strikes, mines, hijacking or seizure. When tensions escalate, insurers often move quickly to review that risk.

Because insurance exposure is distributed through global reinsurance markets, sudden spikes in perceived danger can ripple through the financial system supporting global shipping.

Why It Matters for Americans

The Strait of Hormuz sits half a world away from the United States. But energy markets don’t respect geography.

Every day a large share of the world’s oil moves through that narrow corridor between the Persian Gulf and the Gulf of Oman. Tankers leaving ports across the region have little choice but to pass through it.

That’s why traders watch the strait closely.

When tensions rise — whether from military threats, attacks on ships or even sudden jumps in insurance costs — the shipping market can tighten quickly. And when it becomes harder or more expensive to move crude out of the Gulf, the price of oil often starts to climb.

That’s usually when Americans begin to notice.

Oil prices don’t stay confined to the Middle East.

As crude oil prices move higher, gasoline and diesel prices typically follow.

The effects spread beyond the pump. When fuel becomes more expensive, transportation costs climb. Trucks cost more to run. Shipping companies raise rates. Businesses moving products across long supply chains start paying more as well.

Those increases rarely stay hidden for long. They eventually appear in the prices people see every day.

The Strait of Hormuz may feel distant to most Americans.

But when traffic through that corridor tightens, the impact can still show up closer to home — in fuel prices and the cost of everyday goods.

A Quiet Lever of Global Trade

What’s happening around the Strait of Hormuz illustrates a quieter reality about global trade.

Ships move goods, but financial systems make those voyages possible.

Insurance is a key part of that structure.

When insurers suddenly reprice risk or pull coverage in dangerous waters, shipping can slow even if the sea lane itself remains open.

Most people imagine missiles or naval blockades disrupting global commerce.

But sometimes the first signal appears somewhere far less dramatic — in the insurance market.