Published 29 March 2026 | By Captain Cibeesh Balakrishnan

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WHAT IS THE STRAIT OF HORMUZ?
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At its narrowest, the Strait of Hormuz is just 34 kilometres wide — roughly the distance from London’s City to Heathrow. Through those 34 kilometres flow two shipping lanes, each just 2 nautical miles across, separated by a 2-mile buffer zone. Every superstar of global energy passes through here: crude oil, LNG, fertilisers, condensates.

Around 15–20 million barrels of oil transit daily — approximately one-fifth of the world’s total seaborne supply. Unlike the Suez Canal or the Bab-el-Mandeb, there is no meaningful bypass. Pipeline alternatives from Saudi Arabia and the UAE exist but can handle at best 3 million barrels per day, a fraction of what normally flows through the strait.

“You could argue this is a uniquely challenging chokepoint, because there are no alternatives.”
— Nick Childs, Senior Fellow, International Institute for Strategic Studies (IISS)

Iran controls the northern shore. Oman controls the south via the Musandam Peninsula. To transit, every ship passes through the territorial waters of at least one of them. The US Navy’s Fifth Fleet, based in Bahrain, has historically guaranteed safe passage — until now.

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29-DAY TIMELINE — HOW WE GOT HERE
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28 Feb — DAY 1 | OPERATION EPIC FURY LAUNCHES
US and Israel conduct coordinated strikes on Iran. Supreme Leader Ali Khamenei is killed. IRGC begins broadcasting VHF warnings that passage through Hormuz is “not allowed.”

1–2 Mar — DAYS 2–3 | INSURANCE COLLAPSES OVERNIGHT
Every major P&I club cancels war risk extensions for the Persian Gulf within 48 hours. Maersk, CMA CGM and Hapag-Lloyd suspend transits. Traffic falls 80% — without Iran firing at a single commercial vessel.

2 Mar — OFFICIAL CLOSURE
IRGC confirms the strait is closed and that any vessel entering will be “set ablaze.” Reports of Iranian attacks on ships attempting passage begin to surface.

4 Mar — SELECTIVE ACCESS
One bulk carrier transits broadcasting “CHINA OWNER” via AIS. Reports suggest Iran is allowing selective access for Chinese-flagged and affiliated vessels.

6 Mar — ATTACK ON RESCUERS
A tugboat assisting a stricken vessel is attacked. Three crew reported missing. The IMO condemns the incident: “Seafarers must not be targets.”

7 Mar — WAR RISK SURGE
War risk premiums hit 1% of hull value per voyage — up from 0.25% pre-war. A $100M tanker now pays $1M extra per transit. Supertanker day rates reach $800,000 — four times pre-war levels.

8 Mar — ENERGY SHOCK
Brent crude surpasses $100 per barrel for the first time in four years. Global markets brace for prolonged disruption.

9 Mar — US RESPONSE
President Trump announces the US will “seize control” of the strait and threatens Iran against laying mines. US military assets begin moving toward the Gulf region.

13 Mar — IRAN’S TOLLBOOTH
Iran opens a conditional corridor — vessels may apply to the IRGC for passage through Iranian territorial waters near Larak Island, in some cases involving undisclosed payments. The strait has not reopened. It has been monetised.

19 Mar — US MILITARY OFFENSIVE
US forces strike military facilities at Kharg Island — Iran’s main oil export terminal handling roughly 90% of crude exports. Kuwait’s Mina Al-Ahmadi and Mina Abdulla refineries also hit, disrupting global jet fuel supply.

22 Mar — NEAR STANDSTILL
Only 16 AIS-visible transits recorded in a full week. Historical average: 138 vessels per day. Lloyd’s List Intelligence confirms at least two vessels paid large sums to use the Iranian-controlled corridor.

25–27 Mar — PARTIAL DIPLOMACY
UN Secretary-General calls the war “totally out of control.” Iran agrees to allow China, Russia, India, Iraq and Pakistan-flagged vessels to transit. Humanitarian and fertiliser shipments granted UN-facilitated exemptions. IRGC commander Tangsiri killed in Israeli airstrike. Thai-flagged vessel Mayuree Naree runs aground on Qeshm Island.

29 Mar — TODAY | DAY 29
Brent at $113/bbl. 20,000 seafarers still stranded. No ceasefire framework in sight. The Joint War Committee has extended the designated war zone to include Omani waters.

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BY THE NUMBERS — 29 MARCH 2026
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142 — Total transits, 1–25 March 2026
(Same period last year: 2,652 transits. A 94% collapse in vessel movement.)

$113 — Brent crude price per barrel
(Crisis peak: $126/bbl. Pre-war average: $72/bbl. Jet fuel supply disrupted globally.)

20,000 — Seafarers stranded in Gulf waters
(Approx. 1,000 vessels trapped. Multiple reports of food resupply cut. Internet severed on several ships.)

7.5%+ — War risk premium (hull value per voyage)
(Pre-war rate: 0.125–0.25%. Some syndicate rates now 60× pre-crisis levels. Technically available; commercially unviable.)

$800,000 — Supertanker day rate
(Quadruple the pre-war level of ~$200K/day. Shadow fleet commanding record premiums.)

80%+ — Shadow fleet share of March transits
(February shadow fleet share: 15%. Mainstream operators effectively absent from the route.)

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THE INSURANCE PICTURE — WHAT EVERY MARITIME PROFESSIONAL NEEDS TO UNDERSTAND
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The P&I clubs did not simply raise premiums. They cancelled war risk extensions outright — triggering a cascade that no individual shipowner could have navigated alone. Reinsurers pulled back first, citing aggregation risk: hundreds of large tankers clustered in one confined zone represented a catastrophic concentration of insured value.

⚠ The Blocking and Trapping clause was immediately invoked — providing cover for vessels physically trapped inside the Persian Gulf and unable to exit. Claims are being assessed under circumstances no modern policy had been fully written to anticipate at this scale.

The Lloyd’s Market Association clarified that cover remains technically available — 88% of Lloyd’s marine war syndicates reported continued appetite. But “technically available” and “commercially viable” are two different things when rates are 60 times pre-crisis levels and crew are exercising their right to refuse to sail into a designated war zone.

The US Development Finance Corporation launched a $20 billion maritime reinsurance facility through Chubb to restore market confidence. Moody’s assessed it as a useful signal but insufficient to restart commercial traffic without full liability coverage included.

KEY INSURANCE MECHANISMS IN PLAY:

1. War risk extension cancellations — P&I clubs exercised 48-hour cancellation rights under standard war risk clauses. Coverage lapsed for all vessels in the Persian Gulf zone.
2. Blocking and Trapping (B&T) — Activated for vessels unable to exit. Covers physical detention but not all consequential losses.
3. Crew refusal rights — Under ITF/MLC conventions, crew may refuse assignment to an area declared a war zone. Exercised widely across the fleet.
4. Joint War Committee reclassification — JWC expanded the designated war risk zone to include Omani waters on 27 March — raising premiums on previously “safer” routes.
5. Government reinsurance backstop — US DFC $20Bn facility through Chubb active. Several EU member states exploring similar national backstop programmes.

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ALTERNATIVE ROUTES — AND WHY THEY ARE FAILING
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Saudi East–West Pipeline | Capacity: up to 7 Mb/d
Runs from Abqaiq to Yanbu on the Red Sea. Status: LIMITED — Red Sea also disrupted.

UAE Habshan–Fujairah Pipeline | Capacity: ~1.5 Mb/d
Routes Abu Dhabi crude directly to Fujairah on the Gulf of Oman, bypassing Hormuz entirely. Status: LIMITED — Fujairah port now in JWC war zone.

Kirkuk–Ceyhan Pipeline (Iraq–Turkey) | Capacity: ~0.5 Mb/d
Routes Iraqi crude to Turkey’s Mediterranean coast at Ceyhan. Status: PARTIAL — below historical flow.

Red Sea / Bab-el-Mandeb | Normal capacity: ~6 Mb/d
Houthi attacks resumed the day the Iran war began — closing this corridor simultaneously with Hormuz. Status: CLOSED — Houthi attacks active.

Combined, the available pipeline alternatives can handle roughly 2.6 million barrels per day at full stretch. Before the war, 15–20 million barrels a day moved through Hormuz. There is no path that maintains even 20% of normal supply flows while both Hormuz and the Red Sea remain disrupted.

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20,000 SEAFARERS THE HEADLINES ARE NOT COVERING
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The geopolitical drama of oil prices, military deployments and insurance market mechanics tends to dominate the coverage. But at the centre of this crisis are 20,000 human beings on approximately 1,000 vessels, trapped in waters where attacks are — by the IRGC’s own design — random and pattern-free.

Several crew have been killed. Multiple vessels report food resupply cut. Internet access is being severed on ships in the Iranian-controlled corridor. Crew on some vessels have now been aboard without a port call for weeks beyond their contracted rotation.

“This situation is unacceptable and unsustainable. Seafarers must not be used as instruments of geopolitical pressure.”
— International Maritime Organization, March 2026

Under the Maritime Labour Convention, these seafarers have legal rights to repatriation, to refuse deployment in war zones, and to welfare support. But legal rights and physical reality in the middle of an active conflict zone are different things. The maritime welfare organisations and unions are operating under extreme duress.

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WHAT THIS CRISIS HAS PERMANENTLY CHANGED
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There will be a before and after in marine insurance history. Before 28 February 2026: war risk extensions were a routine line item, aggregate exposure was modelled on historical incident patterns, and the Strait of Hormuz was considered improbable to close for any meaningful duration.

After this crisis, every one of those assumptions is under revision. The questions now being asked at Lloyd’s, in the P&I clubs, at the reinsurance towers — about war risk aggregation limits, about blocking and trapping clause adequacy, about crew refusal rights as a systemic loss trigger, about government reinsurance as a market backstop — will reshape marine war risk policy for a generation.

The clearest lesson is this: in the modern insurance architecture, a cancellation notice travels faster and hits harder than a missile. The chokepoint is not only geographical. It is financial. Closing it does not require mining 34 kilometres of water. It requires making those 34 kilometres uninsurable.

The strait will reopen. The market that comes out the other side will look very different.

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ABOUT THE AUTHOR
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Captain Cibeesh Balakrishnan — Master Mariner & Marine Insurance Professional

With seagoing experience as a ship’s captain and a career in marine insurance, the author brings a rare dual perspective to maritime risk. This article is written for maritime professionals, brokers, underwriters, seafarers and anyone who needs to understand what is happening in Hormuz right now.

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Maritime Intelligence Article — Published 29 March 2026
All figures sourced from Lloyd’s List Intelligence, S&P Global Market Intelligence, Windward, Kpler / MarineTraffic, IMO, US EIA, CNN, CNBC, and Reuters.

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