International Relations GS 2 In the news 8 times

War Risk Insurance and Shipping Economics

Marine insurance is a critical enabler of global shipping. When insurers withdraw coverage or dramatically raise premiums, voyages become economically unviable even if physically possible — effectively shutting down shipping lanes.

Key details

War risk insurance: A separate policy covering damage or loss of a vessel due to war, terrorism, or hostile acts. Standard hull and cargo policies exclude war risk.
Lloyd's of London: The primary market for war risk coverage; sets benchmark rates that the industry follows.
During the Tanker War (1984–88, Iran-Iraq War): Lloyd's progressively raised war risk premiums for Gulf voyages to several percent of hull value per voyage — making many voyages uneconomic.
Current crisis (March 2026): Multiple insurers have entirely withdrawn war risk coverage for the Gulf region, meaning vessels cannot legally sail into the zone (most shipping contracts require vessels to be fully insured).
Supertanker day rates (the daily rental rate for a VLCC): Hit all-time highs in March 2026 as the combination of vessel idling (150+ tankers outside Hormuz) and rerouting demand drives up rates for available tonnage.
Insurance withdrawal → freight rate spike → higher delivered cost of oil → consumer inflation: This is the transmission chain from the geopolitical crisis to household fuel prices globally.

In the news

● Tracked since March 02, 2026 · last seen June 11, 2026 · updates as the daily brief publishes

11 Jun '26

Iran's Closure of Strait of Hormuz and the Global Oil Supply Shock

International Relations

19 Apr '26

Attacks on Indian-Flagged Ships Disrupt Hormuz Passage and Global Trade Flows

International Relations

10 Apr '26

Shipping Risks Escalate in Strait of Hormuz as Iran Tightens Control and Imposes Transit Fees

International Relations

12 Mar '26