The Epaminondas ship is seen during seizure by the Islamic Revolutionary Guard Corps in the Strait of Hormuz, Iran, on April 24, 2026 [Meysam Mirzadeh/Tasnim/WANA via Reuters]By Yashraj SharmaPublished On 28 Apr 202628 Apr 2026
Since the start of the US-Israel war on Iran nine weeks ago, the Strait of Hormuz, through which 20 percent of the world’s oil and liquefied natural gas (LNG) is shipped during peacetime, has become the chokepoint of the global economy.
The tremors from the effective closure of the strait – a narrow artery linking oil and gas producers in the Gulf to the open seas – are being felt across the world, stoking fears of a global recession.
About 2,000 ships remain stranded in the Gulf, waiting to be allowed through. But even if the strait is reopened to all traffic, there will still be obstacles to shipping. The United States has said it will take six months to clear mines it believes have been laid by Iran. Indeed, this was one of the main reasons that maritime insurers cancelled “war risk” insurance for tankers travelling through the strait in March.
Even if the strait reopens, a high level of risk will remain for ships crossing through, which could push premiums up by about 0.25 percent of hull value before the war to as much as 5 percent now, shipping insurers told Al Jazeera this week.
So, what would it take for insurers to underwrite the Strait of Hormuz as safe?
The Iranian military shut the strait, which is shared between the territorial waters of Iran and Oman, following the February 28 strikes on Tehran that killed Supreme Leader Ayatollah Ali Khamenei. His son, Mojtaba Khamenei, has taken over the top job in Tehran since.
Tehran used access to the strait as its most powerful leverage in talks between the US and Iran in Islamabad, Pakistan, on April 11, but these failed to yield results.
Two days later, US President Donald Trump announced a naval blockade of Iranian ports and the Strait of Hormuz to put economic pressure on Tehran, which had until then been able to ship its own exports through the passage. Washington has since captured or turned back ships linked to Iran – both in the Gulf and in the Indo-Pacific region – which Tehran has denounced as “piracy”.
While Tehran was previously allowing ships from countries it deemed “friendly” or which paid a toll – mostly from India, Pakistan, Turkiye and China – to pass the strait, it has now closed it to all foreign-flagged ships until the US lifts its naval blockade.
Meanwhile, Iran has published a map showing parts of the strait that it said had been mined, and an alternative route for approved ships earlier this month. This route brings ships much closer to the coast of Iran, whereas they previously passed closer to Oman. Iran said this was to help tankers avoid the danger of mines.
On Thursday, Trump ordered the US military to “shoot and kill any boat, small boats though they may be (Their naval ships are ALL, 159 of them, at the bottom of the sea!), that is putting mines in the waters of the Strait of Hormuz” in a social media post, emphasising “There is to be no hesitation”.
“Additionally, our mine ‘sweepers’ are clearing the Strait right now. I am hereby ordering that activity to continue, but at a tripled up level!” he wrote in a post on his Truth Social platform.
Halting traffic in the Strait of Hormuz has caused “the largest oil supply disruption in the history” of the global market – bigger than the 1970s oil shocks – according to the International Energy Agency.
On April 11, the US military said it had begun operations to clear mines in the strait. Two US Navy guided-missile destroyers – USS Frank E Peterson and USS Michael Murphy – conducted the operations. They were later reportedly joined by underwater drones to detect mines.
On April 21, Pentagon officials informed the US House Armed Services Committee that it could take six months to fully clear the Strait of Hormuz of mines deployed by the Iranian military.
They added that any such operation is unlikely to be carried out until the war ends. “We feel confident in our ability, in the correct period of time, to clear any mines that we identify,” Pete Hegseth, the US defence secretary, told reporters on Friday.
However, analysts warn that sweeping the Strait of Hormuz clear of mines with complete certainty could be a near-impossible task. Furthermore, if there is any risk of mines remaining, this will deter insurers and halt traffic, maritime insurers told Al Jazeera.
This uncertainty pays off for Tehran’s asymmetric warfare. “If the situation changes by the hour, the risk becomes almost impossible to price responsibly,” said Oscar Seikaly, CEO of NSI Insurance Group, based in Florida, US. “The market can insure volatility, but it struggles to insure uncertainty.”
“War-risk insurers are not looking for a risk-free environment; they are looking for a risk they can quantify, price, and spread across enough capacity,” he added. Without any certainty about the number of mines in the strait, this is impossible.
Jakob Larsen, head of maritime security for BIMCO, the largest international association representing shipowners, warned that even after peace is brokered, “the mine threat is of particular concern” when it comes to returning to pre-conflict traffic patterns.
“Given the Iranian indications that mines have been laid in parts of the Strait of Hormuz, a mine clearance effort will most likely be needed to fully reopen the Strait,” Larsen said in a statement.
“Shipping will be restricted to using routes close to Iran and Oman. Due to their confined nature, these routes cannot safely accommodate the normal volumes of shipping through the Strait of Hormuz,” he noted.
Maritime war and insurance experts told Al Jazeera that a lasting commitment by all parties to maintain peace along the sea route is the least they will require to consider the Strait of Hormuz safe again.
“There must be an explicit commitment by all parties to enforce freedom of navigation through established and internationally recognised shipping channels,” said Munro Anderson, director of marine strategy and operations at Vessel Protect, a specialist underwriter of marine war risks, based in London, UK.
Anderson told Al Jazeera that the insurance market is in a position to facilitate cover if the transit of a vessel has been approved by the Iranian authorities.
Still, a degree of residual risk will remain in transiting the Strait of Hormuz when reopened, he added. “The level to which that is acceptable is a matter for each insurer according to their own appetite,” Anderson said.
“Risk is often multifaceted” for the vessels trying to transit the sea route, he noted.
“The main risks result from a significant lack of command and control within Iranian forces, which has resulted in vessels being approved for transit yet still being attacked,” Anderson added, in a reference to the attack on an Indian-flagged ship, the Sanmar Herald, on April 18.
The Indian-flagged oil tanker was fired upon by Iranian military boats in the sea route. In the audio from the incident, the ship’s captain can be heard saying: “Sepah Navy! This is motor tanker Sanmar Herald. You gave me clearance to go. My name is second on your list. You gave me clearance to go. You are firing now! Let me turn back!”
For this reason, pauses in the fighting will not be enough for underwriters to begin insuring ships in the strait again, said Seikaly of NSI.
“They need evidence that the threat environment has fundamentally stabilised,” he told Al Jazeera. “That means a durable ceasefire or political resolution, clear naval security guarantees, consistent freedom of navigation, no recent vessel seizures or attacks, credible mine clearing and surveillance, and predictable rules of engagement among the key military actors in the region.”
More importantly, to restore confidence in the market, the insurers “require normal vessel movement to resume over a sustained period, not just isolated transits”.
“The moment underwriters believe a single incident could trigger a broader regional escalation, close the waterway again, or expose multiple vessels at once, the risk becomes much harder to support at scale,” Seikaly said.
Before the war disrupted traffic, war-risk premiums for the Hormuz transit were mostly priced at just below 0.25 percent of hull value. Even if the strait is reopened, they could be as much as 20 times higher, experts say.
“More recently, the market has pointed to a range closer to 1 percent to 5 percent, with some outlier quotes higher depending on the vessel, cargo, flag, and ownership,” Seikaly said.
Another maritime insurance industry insider in the United Kingdom, who preferred not to be named, confirmed that premiums have risen astronomically and are edging up to 5 percent of hull value. This means that for a $100m hull value, the vessel needs to pay $5m for the transit compared with approximately $250,000 pre-war.
“Underwriters are cautiously monitoring for any sign of progress in negotiations or subsequent indications of increased risk,” they said.
“If attacks, seizures, mining concerns, or military miscalculation continue, premiums can move sharply higher,” Seikaly added. “If there is a durable ceasefire and consistent escorted movement, pricing may stabilise, but it will not immediately return to pre-conflict levels.”
