Tanker transits through Hormuz rise as war-risk premiums remain high
Shipowners are returning their vessels to the strait more quickly than insurance underwriters are lowering rates, leaving owners to absorb elevated costs.
The Metro Venetian, a Greek-owned tanker, sustained a projectile hit off Oman on August 25 but kept its crew and engine room intact — a single incident in a strait crowded again with ships, as Greek Reporter noted on August 25.
The fleet's return to Hormuz is outpacing any reduction in insurance premiums. That widening gap between transit numbers and insurance quotes marks who trusts the strait's safety; at the moment, shipowners do, while underwriters do not. Whoever misjudges is absorbing the loss, and the coming paragraphs show who is likely carrying it.
Lloyd's List Intelligence reported August 27 that, between August 17 and 23, there were 108 Hormuz transits, a 27 percent increase over the previous week and the highest since the Washington–Tehran memorandum broke down in early July. Yet this remains well below what brokers would call normal.
The insurance cost for one crossing shows the rest of the story. War-risk premiums for Hormuz have jumped from roughly 0.25 percent of hull value before the conflict to about 5 percent, according to deVere Group's analysis citing Lloyd's Market Association figures — now about five million dollars to insure a hundred-million-dollar tanker for one trip, versus a quarter million previously, as TFTC reported August 26.
Neil Roberts, Lloyd's Market Association's marine and aviation head, said in July that "war-risk rates have moved as risk has moved," and rates remain close to that five percent mark even with ships returning, according to TFTC on August 26.
Brent crude barely reacted. ZeroHedge reported August 26 that Brent had fallen for a third straight session, down to about $86 — roughly a third below its late-April peak above $120 — as traders focused on Iran-Oman corridor negotiations rather than traffic statistics.
Iran's position remains adversarial. Lloyd's List Intelligence reported August 27 that Iran's Persian Gulf Strait Authority published a blacklist of 45 vessels, mainly tankers accused of violating unilateral transit rules. Twelve of the listed VLCCs accounted for over 15 percent of crude liftings from the Middle East Gulf since the July breakdown.
The crews carry the tail
Transit counts are universally cited but miss what matters most. They only reflect hulls, not repeated crossings. Since the ceasefire, exports have relied on shuttle tankers and ship-to-ship transfers, concentrating risk onto a smaller subset of vessels making multiple runs through dangerous waters. Lloyd's List Intelligence, on August 27, noted at least 19 seafarer deaths since the conflict began, citing International Maritime Organization figures.
This exposure is not priced into premiums: war-risk policies cover single journeys, while crews commit to seasons of transits.
Each crossing is measured as an independent event, but crews experience cumulative risk, and they are not compensated per crossing for the added danger.
Eastern Herald reported August 26 that the proposed Iran-Oman corridor would channel inbound ships through Iranian waters and outbound ships through Omani waters, under a temporary scheme for separating traffic — a framework, not a reopening, as Oman's foreign minister returned from Tehran with. London has not reduced premiums for the Iranian section; Roberts, per TFTC August 26, stated rates move with risk, and that approach works both ways. Owners can reroute ships quickly, but insurance committees take much longer to reprice a strait, and the Metro Venetian incident shows quiet has not been achieved.
A comparable precedent is the Red Sea after 2023, when traffic collapsed for months since no price could offset the missile threat. The counter-example is 2019 in the same region, when owners returned within weeks, spurred by freight rates — Gulf crude offers enough margin that voyages resume rapidly. The present week resembles 2019 but features longer-range missiles and a fleet composed of state-linked and Sinokor-linked tonnage rather than the independent majors, meaning those running the strait are least able to recover from a hull loss.
Who pockets the gap
Underwriters are collecting the spread. Five percent of hull value per transit is a windfall rate, and each week the fleet sails faster than premiums adjust, the London market profits from the gap between actual and priced risk.
Charterers pay through. Freight rates for Gulf VLCCs remain high compared to pre-conflict levels, and war-risk premiums now appear explicitly on voyage estimates, so every barrel arriving at Jamnagar or Yeosu reflects the strait’s cost in its price.
Asian refiners absorb the cost last, and with minimal flexibility. TFTC, on July 23, reported about four-fifths of strait oil heads for Asia, and Japan and South Korea maintain slimmer strategic reserves than China, buying cargoes at higher freight and insurance costs.
Washington’s impact pushes costs up. Lloyd's List Intelligence on August 27 reported the August 19 "Economic D-Day" sanctions package targeted nearly 60 entities, including a UAE bunker supplier, marking the first sector directly affected — adding fuel and compliance costs to already expensive voyages.
What would resolve whether transit counts or premium quotes are the truest signal is clear: the war-risk premium published for a single Hormuz transit. If London lowers it after weeks of quiet, the return traffic was the meaningful indicator. If it stays at five percent as numbers climb, the fleet is earning higher freight to shoulder risk the insurance market refuses to reprice. The crews — not the owners, charterers, or refiners — are left holding the risk.
The strait's reopening follows the owners’ timeline, repricing follows the underwriters’ timeline, and between these stands a crew, committed to a season of crossings at a price fixed for only one.