Iran does not need the strait closed. It needs the strait uncertain.
War-risk premiums carry the cost of Tehran’s campaign to the world’s tankers. The strategy behind them is about permission, not price.
Barrels move, ships hesitate
Shipping headlines still frame Hormuz as a closure story, but the numbers point elsewhere. In mid-October roughly 13.9 million barrels a day of crude and 2.3 million of products were still crossing the strait.
Weekly vessel transits, however, were running about 70% below pre-war levels, and more than 200 ships waited at anchor off Fujairah and Khorfakkan. The gap between barrels and ships is filled by insurance.
War-risk cover now costs 3–10% of a vessel’s hull value for a single transit, against about 0.2% before the war.
Goldman Sachs attributes around US$7 a barrel of this year’s freight increase to that premium alone.
The obvious explanation
It is tempting to conclude that Tehran’s real weapon is the London insurance market. That is partly right. Premiums turn a limited number of attacks into a cost carried by every owner, charterer and refiner using the Gulf, and ultimately by fuel buyers in Asia and Europe.
But if higher premiums were the goal, Iran would strike at random. It does the opposite.
A rulebook, enforced
The attacks follow a rulebook. Most tankers hit in early October were using the southern channel along the Omani coast, with their transponders switched off and without authorisation from Iran’s Persian Gulf Strait Authority (PGSA).
The Revolutionary Guards have declared that ships running dark will be treated as hostile, and that vessels cooperating with US forces will face a “decisive response”.
That punishes a choice of route, the behaviour of an administrator rather than a saboteur.
Since June, Iran has also required every transiting ship to carry PGSA-approved insurance. It is free for now, with fees reserved.
Iran is not only exploiting underwriters, it wants to become one.
Two goals, one corridor
The strategy serves two goals at once.
The first is bargaining. Tehran’s standing offer is to reopen the strait within seven days if Washington lifts its naval blockade, waives oil sanctions, releases frozen assets and accepts a ceasefire that includes Lebanon, with nuclear talks coming only afterwards.
High freight and fuel prices keep that offer in front of US policymakers.
The second goal is sovereignty: permits, a designated corridor near Larak Island and Iranian insurance, a regime designed to outlast any deal.
Keeping oil flowing serves both goals. A full closure would unite Iran’s opponents and hurt China, its main customer.
The battle over data
October added a new front: information. UKMTO says it can no longer count attacks accurately, because most targeted ships no longer report to it. Between 10 and 20 October the Guards announced mine strikes at least five times.
None was independently confirmed, and the regional naval information centre found no basis for the latest claims.
Each announcement still moved the market. When data is thin, underwriters price the worst plausible case, and Iran increasingly shapes what they see. Strikes off Al Jubail and near Khorfakkan widen the area priced as dangerous.
What it means for shipping
For shipowners this creates a trap. Following Tehran’s rules risks US sanctions, while ignoring them risks attack and voyages that cannot be insured at a workable price.
Operators should expect war-risk terms tied to behaviour, such as AIS discipline, route declarations and reporting duties.
Disputes over who pays premiums and delay costs will grow, and the fleet will divide further between ships that can trade under Iranian administration and those that cannot.
Three signals will show the next turn: the PGSA switching on insurance fees, independent confirmation of a mine strike, and crude flows falling below 10 million barrels a day for a sustained period.
