19JUL

Brent clears $87 as Hormuz traffic thins

2 min read

14:05UTC

Brent crude traded above $87 a barrel on 17 July, up more than 14 per cent on the week, while transits through the Strait of Hormuz fell to eight vessels and war-risk premiums reached 3 to 10 per cent of hull value.

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Key takeaway

Brent passed $87 as Hormuz transits fell to eight vessels and war-risk cover reached 10 per cent.

Brent Crude traded above $87 a barrel on Friday 17 July, a one-month high and a rise of more than 14 per cent on the week ¹. Transits through the Strait of Hormuz fell to eight vessels on 16 July, down from 15 the day before and against a pre-war baseline above 100 ². Roughly a fifth of the world's seaborne oil normally passes through that channel.

War-risk premiums, the surcharge underwriters levy for sailing dangerous waters, now run at 3 to 10 per cent of hull value against 0.25 per cent before the war ³. An owner who paid $250,000 to insure a $100m hull through the strait is now quoted between $3m and $10m for the same passage, which exceeds what most single cargoes earn. No physical barrier has been placed across the water. the strait shuts on an underwriter's spreadsheet before it shuts on anything else, and the IRGC's mining claim of 18 July, which CENTCOM called false , moves that spreadsheet whether or not a single mine is ever recovered.

That asymmetry favours Tehran. Laying enough ordnance to physically close Hormuz is beyond what Iran can sustain under nightly bombardment; making insurers behave as though it might is not. Tehran can assert a minefield for the price of a broadcast, and the premium moves on the assertion.

Deep Analysis

In plain English

The price of oil jumped to its highest level in a month, and the number of ships passing through the Strait of Hormuz fell sharply, because insurance companies are charging shipowners far more to sail through the strait than they were before the war. That insurance surcharge, called a war risk premium, has gone from a quarter of one per cent of a ship's value to as much as 10 per cent, which on a $100 million ship can mean paying $10 million just to insure one voyage. Shipowners are choosing not to sail rather than pay that much, which is why fewer ships are passing through even though no one has physically blocked the strait.

Deep Analysis

Root Causes

The Joint War Committee's Listed Areas system exists because individual underwriters cannot each independently assess mine risk in real time; they delegate that judgement to a committee that reviews the area periodically rather than continuously.

That institutional lag is the actual mechanism Iran's unconfirmed mining claim exploits: the claim does not need to be true, it needs only to be plausible enough that the Committee does not remove Hormuz from its list, and removal happens on the Committee's schedule, not on a mine-clearance timetable.

What could happen next?

Meaning
Iran can move global oil prices and shipping insurance by making a claim alone, without needing to sustain the physical capability to close the strait, so long as the claim is not immediately and conclusively disproven.

Source Landscape

This story draws on mixed-leaning sources from Qatar and United Arab Emirates

Qatar

United Arab Emirates

Primary parallel: during the 1984-88 Tanker War, Lloyd's designated the Gulf a war zone and premiums for vessels transiting it rose several-fold within weeks of the first attacks, a rise that persisted for the length of that eight-year conflict rather than tracking week-to-week incident counts. The current spike to 3-10 per cent of hull value follows the same listing-driven logic.

Counter-parallel: the 2019 Gulf of Oman tanker attacks produced a comparable premium spike that reversed within weeks once no follow-on strikes materialised, showing Listed Area pricing can unwind quickly when a conflict does not escalate further. Whether this war tracks the 1980s multi-year pattern or the 2019 short-lived spike is exactly what is not yet known.

Consensus view: War risk cover for shipping is priced against the Lloyd's Market Association's Joint War Committee "Listed Areas" designation, and once a stretch of water sits on that list, underwriters price to the designation itself rather than to any single incident, which is why premiums can move on a claim of mines rather than on a confirmed mine.

Counter-view: shipowners and the International Group of P&I Clubs have long argued that Listed Area pricing is sticky downward: reversing a designation requires the Joint War Committee to actively review and de-list a zone, not merely for incidents to stop, so premiums set now may persist for weeks or months after the underlying risk recedes.

Key tension: whether the current 3 to 10 per cent premium reflects live, continuously reassessed risk, or a listing that will take longer to unwind than the conflict itself once fighting slows.

Sources:Al Jazeera·The National·GlobalSecurity.org

Mentions:Brent Crude →Strait of Hormuz →Iran →Lloyd's Market Association →International Group of P&I Clubs →Gulf of Oman →Tanker War →Oman →Tehran →

First Reported In

Update #156 · First US combat deaths, at a base in Jordan

Al Jazeera· 19 Jul 2026

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Causes and effects

Caused by

IRGC claims mines shut Hormuz; US denies

The IRGC's 18 July mine claim compounds the transit collapse and insurance surge priced into Brent.

Occurred 17 Jul 2026

Read story →

This Event

Brent clears $87 as Hormuz traffic thins

Insurers have priced the strait closer to shut than any physical obstruction has yet made it.

Different Perspectives

Shipping and war-risk insurers

War-risk premiums for Hormuz transits reached 3 to 10 per cent of hull value on 17 July, against 0.25 per cent before the war, as Brent cleared $87 and daily transits fell to eight vessels. Underwriters are pricing the confirmed UKMTO mine near the Traffic Separation Scheme, not the IRGC's unconfirmed 18 July mining claim, which CENTCOM called false.

Oman

Abbas Araghchi led an Iranian delegation to Oman-hosted talks in Muscat on 18 July, an agenda confined to reopening the Strait of Hormuz and nothing else. Oman's decades of studied neutrality make it the one channel neither Washington nor Tehran needs to be seen initiating, and that narrowness is what lets it survive the bombing.

Kuwait

Kuwait's electricity ministry asked residents to ration water and power after the IRGC set Shuaiba's generating units alight on 17 July, the second Kuwaiti site struck in two days. The country draws 90 per cent of its drinking water from plants sharing power infrastructure, so one strike reaches every tap in the hottest weeks of the year.

Jordan

Amman still reports no casualties or damage of its own from the 17 July attack even as CENTCOM confirmed two American dead on the same runway, a line it has not amended since. Hosting the base that produced the war's first US fatalities puts Jordan's decades-old defence arrangement with Washington under a domestic scrutiny it has not faced before.

Tehran / Artesh and AEOI

Iran's Atomic Energy Organisation called the alleged Darkhovin strike a violation of international law, while the Artesh put Operation Saeqeh, its campaign against Kuwait, Jordan and Bahrain, at phases 14 and 15 by 18 July. Domestic outlets Fars and Tabnak claim 16 Americans dead since February, a toll no source outside Iran supports.

CENTCOM / Washington

CENTCOM confirmed two dead and one missing at Muwaffaq Salti on 17 July, when Jordan says its air defences intercepted eight of ten incoming missiles, against five of five stopped on 10 June. Its own strikes stay aimed at Iran's coast, interior and navy, not the Artesh campaign that killed them.