Hormuz war-risk insurance jumps again; premiums near 5 percent of vessel value

With escalating tensions and attacks on three commercial vessels in recent days, war-risk insurance premiums for tankers and ships crossing the Strait of Hormuz jumped again, reaching about 5 percent of a vessel's value as the new market norm; earlier in the conflict the rate had briefly climbed to around 10 percent.

At that level, a single transit for a tanker worth roughly 100 million dollars can cost millions of dollars in insurance, versus a fraction of one percent before the conflict began. The US Navy-led Joint Maritime Information Center raised its advisory for crossing the strait from "substantial" to "severe," the highest category.

War-risk cover is typically sold on a seven-day basis and repriced every 24 to 48 hours. Higher insurance costs and reduced traffic directly affect Iran's oil exports and the flow of goods in the region.