Brent Crude held above $85 per barrel on Day 7, with analysts warning of $100–120 per barrel if the strait of Hormuz remains effectively closed beyond two to three weeks. Shipping consultancy Simpson Spence Young assessed US Navy convoys as "unlikely in the near-term," given simultaneous combat demands on American naval assets. Trump's promised DFC insurance programme and Navy escort system remain non-operational; no escorted commercial passage has been attempted.
The binding constraint is now contractual, not military. Every major Protection and Indemnity club's war risk cover expired at midnight on Thursday. Without P&I insurance, no commercial vessel can legally transit the strait — cargo cannot be discharged at destination ports, charterers will not accept the liability, port authorities will not grant entry. Even an immediate ceasefire would not restore shipping: P&I clubs conduct independent reassessments that typically require weeks, and their timelines respond to actuarial models, not diplomatic announcements. More than 150 vessels sit at anchor in The Gulf of Oman and Arabian Sea, unable to move in either direction.
Iraq's exports have fallen by 1.5 million barrels per day as tanker availability drops, compounding supply losses across The Gulf. China's separate safe-passage arrangement with Iran for Chinese-flagged vessels may allow some oil to move — but at terms Beijing sets, creating a two-tier Hormuz where roughly 60 per cent of Gulf crude bound for Asia could resume while Western-bound cargoes remain blocked. Goldman Sachs's Q2 forecast of $76 per barrel, issued earlier this week, assumed partial Hormuz restoration before June — an assumption that now depends on an insurance industry with no commercial incentive to rush.
The 1980s Tanker War offers limited precedent. Between 1984 and 1988, Iran and Iraq attacked more than 400 commercial vessels in The Gulf, but shipping continued because the attacks were selective, insurance remained available at higher premiums, and the US Navy eventually provided escorts under Operation Earnest Will. The current situation is different in kind: a functional blockade enforced not by mines or patrol boats but by the withdrawal of the commercial infrastructure — insurance, classification, port-state acceptance — without which tankers cannot operate. The bottleneck is self-reinforcing: combat operations prevent Navy escorts, absent escorts prevent insurance renewal, absent insurance prevents transit. Twenty thousand seafarers and 15,000 cruise passengers remain stranded in Gulf and Arabian Sea waters with no repatriation route.
