Hormuz reopened on paper. The insurers have not agreed to the peace.

On June 17, Iran and the United States signed a memorandum of understanding, and on paper the Strait of Hormuz reopened. Brent crude traded at $92.9 a barrel on Thursday morning, up from about $66 before the war began in late February — a comparison Al Jazeera drew on August 21.

Two months after the peace document, oil still prices the strait as if it were closed, and the reason sits not in any government's hands but in a clause drafted at the Lloyd's Market Association in London.

Kpler, the maritime intelligence firm, counted just 236 ships transiting Hormuz between August 1 and August 19, against roughly 130 vessels a day before the war, as Al Jazeera reported on August 20. Of those, 148, more than six in ten, sailed dark with their tracking transponders switched off or on unclassified routes. Only four ships openly used anything other than Iran's prescribed route.

The strait did not reopen. It went quiet and untraceable.

The actors want incompatible things. Tehran wants notification before departure, authority over inbound traffic, and fees equal to 5% to 7% of cargo value through its new Persian Gulf Strait Authority. Oman wants around 3% and the exit-clearance role. Washington wants free passage with no tolls at all, and Reuters reported via Profit by Pakistan Today on August 7 that it has sanctioned the Iranian agency that would collect them.

Every shipowner caught between them must decide which power to defy. Al Jazeera's August 20 reporting says they fear Tehran more: a fifth of energy-carrying ships openly defied Trump’s blockade by taking the Iranian route, while only two oil and gas carriers dared declare the Omani one.

Then there are the people whose signature actually matters. In late July the Lloyd's Market Association introduced wording that can terminate war-risk coverage entirely for any vessel that pays a transit fee, toll or charge to pass through the strait, as Reuters reported via Profit by Pakistan Today on August 7. Pay Muscat's 3%, let alone Tehran's 7%, and you may sail uninsured into a waterway where ADNOC reports fifteen of its vessels have been hit by missiles and drones since the war began, killing one crew member and injuring twenty, according to Al Jazeera on August 20.

The clause converts every diplomatic compromise into an uninsurable act.

What London really thinks

War-risk cover inside the Gulf ran around 3% of vessel value this summer, twelve times the roughly 0.25% quoted before the conflict, Insurance Business reported on August 17. For a tanker worth between $200 million and $300 million that means several million dollars per voyage, repriced every day or two. Lloyd's responded in June with a marine war risk consortium offering up to $200 million each for hull and liability risks plus another $200 million of cargo capacity for Hormuz transits, according to Insurance Business on August 17.

Capacity was built for a crisis, not for a peace. Insurers have said outright that rates will stay elevated even after traffic resumes, because the last breakdown is still fresh in their models.

The trigger this week was Trump telling Fox News he might bomb Oman, a country he called an ally, if it gets in the way: "If Oman gets in the way, we'll bomb the s*** out of them" (Insurance Business, Aug 17). But the slow pressure underneath is older and simpler.

Oil and liquids through Hormuz averaged 4.9 million barrels per day in the second quarter, down from 21.6 million in the final quarter of 2025, and Insurance Business reported on August 17, citing EIA, that the Energy Information Administration assumes constrained flows through August before any recovery from September. The strait carried about a fifth of world petroleum consumption before the war. That share is being rebuilt, or not, by underwriters rather than negotiators.

During the Tanker War of the 1980s, when Iran and Iraq attacked shipping in the Gulf for eight years, the solution was American reflagging: Kuwait's tankers sailed under the Stars and Stripes with US Navy escorts, and insurance stayed available because a superpower absorbed the military risk and the market priced the rest. This time Washington is not escorting neutral traffic, it is running its own blockade of Iranian ports, firing Hellfire missiles at vessels like the Panama-flagged Vela Nova on August 11 for trying to break it, Al Jazeera reported on August 20. The guarantor and the threat are the same navy.

In the Red Sea, Houthi attacks pushed most box ships around the Cape of Good Hope because the owners had somewhere else to go. Hormuz has no Cape. A ship that cannot afford the premium cannot detour, so it does the only thing left: it switches off its transponder and slips through the dark, which is why six out of ten transits are now invisible to trackers, as Al Jazeera reported on August 20. Dark navigation removes the target, and it also removes the evidence. Underwriters cannot price what they cannot see, and what they cannot price, they exclude.

Asian refiners buying Gulf crude pay the war-risk surcharges folded into freight, and Saudi, Iraqi and Kuwaiti shippers are already running ship-to-ship transfers off Oman to disguise their routing, Al Jazeera reported on August 20. Tehran collects from the fifth of traffic that defies Washington openly. Lloyd's syndicates collect the largest peacetime-to-wartime margin in marine memory while writing seven-day policies they can reprice every day. Who profits least is the cargo owner, who now pays either a fee that voids his cover or a premium that rivals his margin.

Watch the wording

The Joint War Committee's listed-areas wording and the daily additional-premium quotes matter more than the negotiation headlines. If the Iran-Oman understanding announced Monday hardens into a treaty and London still holds rates near 3% with the anti-toll clause intact, the paper reopening stays a fiction and the dark fleet keeps growing. Physical confirmation is simple. Tracked daily transits recovering toward triple digits without a matching spike in claims.

What breaks this read is the Lloyd's Market Association withdrawing the toll-termination clause and premiums falling toward 1% within weeks of a signed agreement. That would mean underwriters had accepted the political settlement as durable. Nothing less counts.

In the Strait of Hormuz, sovereignty is decided in London boardrooms, and no amount of signatures in Washington changes a policy worded to lapse the moment someone pays the toll.