The escalating military conflict involving Iran has thrown international maritime trade into turmoil, with major marine insurance providers withdrawing war risk coverage for vessels operating in the region. Companies such as Gard, Skuld, NorthStandard, the London P&I Club and the American Club have issued notices dated 1 March confirming that cancellations would come into effect from 5 March. The exclusions apply to Iranian waters, the Gulf and adjacent shipping lanes, though Skuld indicated it was exploring a buy-back option to restore coverage.
The crisis has intensified following US and Israeli strikes launched on Saturday, prompting retaliatory action from Iran that has dramatically heightened the danger to commercial vessels over the past 24 hours. At least three tankers have sustained damage, one seafarer has been killed, and approximately 150 ships — including oil and liquefied natural gas carriers — were anchored in and around the Strait of Hormuz by Sunday, according to shipping data.
The Strait of Hormuz is among the world's most critical maritime chokepoints, with vessels transporting oil equivalent to roughly one-fifth of global demand passing through from Saudi Arabia, the United Arab Emirates, Iraq, Iran and Kuwait. Tankers carrying diesel, jet fuel, petrol and other refined products also traverse the waterway. The disruption triggered a 9% surge in global oil prices on Monday.
Freight costs for transporting crude from the Middle East to Asia, already at six-year peaks, are poised to climb further as shipowners grow increasingly reluctant to dispatch vessels into the region, according to market sources and analysts. The benchmark spot rate known as TD3C has nearly tripled since the beginning of 2026. Brokers estimated the cost of chartering a very large crude carrier on the crucial Middle East to China route at roughly 4% above Friday's level early on Monday in Asia, near W225 on the Worldscale industry measure — equivalent to at least $12 million.
"TD3C rates were rising exponentially before the attacks and will continue to remain elevated as countries scramble to meet their energy needs," said Emril Jamil, a senior LSEG analyst. A shipbroker, who declined to be identified as they were not authorised to speak to media, said all Middle East loading routes were expected to hold firm, though considerable uncertainty remained over where Monday's final rate would settle. Additional demand for vessels to load crude from the US and West Africa on longer voyages could also bolster freight rates on those routes, according to a shipping company source.
