The Baltic Exchange assessed the TD3C Middle East Gulf to China VLCC route at WS372 on Friday 17 July, roughly 15 Worldscale points above the previous Friday and about 27% above the WS293.89 print of 3 July1. War-risk hull cover for Hormuz transits widened the same day to 3-10% of hull value, with 5% emerging as the market norm2, against the 3-4% baseline this desk recorded in late June.
Put that in cash. On a $100m VLCC, 5% is $5m a voyage against roughly $250,000 before the war, or about $2.50 a barrel across a 2m-barrel cargo. The loading has doubled from the $1 to $1.50 range of a month ago, and it sits on top of the freight rate rather than inside it.
War-risk cover is the slowest instrument in the complex to move and the hardest to talk down, because it reprices on the London market's read of loss frequency rather than on political signalling. The Lloyd's Joint War Committee listed-areas mechanism compounds that: a single insurable casualty inside a designated zone moves the whole quoted band, which is how 3-4% became 3-10% in one step instead of drifting. Underwriters moved when two UAE supertankers were actually hit, and not when ministers issued statements about the strait.
This breaks the pattern the desk has traded since late June, when the TD3C 4Q26 forward sat at $181,163 a day and would not budge while Brent shed 8%. Charterers who took that forward cover are now materially in the money against a WS372 spot, so paper freight length is quietly subsidising physical programmes. The reverse trade deserves naming too: both legs can retrace far faster than a premium priced into the curve, and if the strike tempo slows, freight and hull cover come off before the flat price does.
