Summary
Highlights
At its peak, war risk premiums were 4,000 times pre-crisis levels, and supertanker charter rates hit $800,000 per day. The US government had to establish a $40 billion DFC reinsurance facility due to private insurers' unwillingness to cover the risk. Howden Re, a major reinsurance broker, describes the situation in Hormuz as a permanent structural repricing of marine war risk, not a temporary spike, indicating a lasting elevation of risk.
The professional risk market, which prices physical maritime supply chains, sees Hormuz as a permanently elevated risk environment, despite a 60-day toll waiver. This creates a significant divergence between the paper crude market and the physical shipping market regarding the strait's stability.
When the 60-day agreement expires or negotiations fail, the PGSA can simply reinstitute full permit enforcement without even reimposing the $2 million transit fee. Vessels without PGSA clearance will face the choice to pay, reroute via the Cape of Good Hope (adding two weeks and significant fuel costs), or stop, leading to supply constraints. Either outcome would sharply increase physical energy market prices.
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