13SEP

Insurers and mines keep Hormuz shut

3 min read

13:27UTC

BIMCO's chief safety officer Jakob Larsen called Hormuz transits "still very risky" on 18 June as foreign-flag traffic stayed away and war-risk cover withheld.

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Key takeaway

Washington lifted the only closure it controlled; insurers and mines keep the strait shut.

Jakob Larsen, chief safety officer at the Baltic and International Maritime Council (BIMCO), the world's largest shipping body, said on 18 June that Strait of Hormuz transits were "still very risky" ¹. His verdict came hours after CENTCOM lifted its blockade , and it explains why the lift changed almost nothing on the water.

Foreign-flag commercial traffic stayed away on 18 June. Transit ran at 5 to 10 per cent of pre-war volume, almost entirely Iranian domestic-flag ships, which means fewer than ten vessels a day crossing a channel that once carried over a hundred ². London war-risk cover, withdrawn in March, had not returned. Premiums for the few crossings still being underwritten had run to 3 to 8 per cent of hull value, up to $8m a passage, against 0.25 per cent before the war ³.

Mines laid across the channel would take 40 to 50 days to sweep at the conservative estimate, up to six months for a full clearance ⁴, so the oil cannot physically return for weeks even with the blockade gone. The Conwartime clause in standard Charter contracts, which lets a captain refuse a passage judged too dangerous, remained triggered across the Gulf.

Three separate actors hold three separate locks on the strait: the US Navy, the London insurers, and whoever laid the mines. CENTCOM opened the naval lock and left the other two untouched. The International Group of Protection and Indemnity Clubs in London covers roughly 90 per cent of ocean-going tonnage, and its war-risk exclusion, not the US fleet, is now the operative closure. Zero new foreign-flag transits followed Trump's signature , because the levers that remained never answered to him.

Deep Analysis

In plain English

On 18 June, the US Navy formally stopped enforcing the blockade. But mines and London war-risk insurers remain in place, keeping commercial tankers out. Insurance companies in London have refused cover for ships trying to cross since 5 March 2026. Mine-laying by Iran's Revolutionary Guard means the water has not been certified safe. The International Group of P&I Clubs requires either a UN Security Council resolution or government certification before reinstating cover. Neither has been issued. As of 18 June, no extra Gulf oil had physically moved.

Deep Analysis

Root Causes

The London insurance market's Hormuz exclusion predates CENTCOM's blockade by five weeks: P&I cover evaporated on 5 March 2026, when Joint Hull Committee guidance and 72-hour cancellation notices took effect. This sequence matters because the actuarial exclusion is independent of the military conflict's trajectory.

The mine dimension compounds the insurance problem. Lloyd's war-risk de-listing triggers on physical certification of cleared water, not on diplomatic agreements. Until the IRGC or a coalition minesweeping operation produces a verified cleared lane, no P&I club can restore cover without breaching its own underwriting standards.

The CONWARTIME clause adds a third layer: even if a ship owner decided to send a vessel regardless of war-risk cover, the captain retains a legal right under Conwartime 2004 to refuse the voyage if conditions are 'too dangerous.' BIMCO's stated position on 18 June gives every captain grounds for refusal that will survive legal challenge from charterers.

Escalation

The gap between the diplomatic and physical states of Hormuz creates conditions for misread signals. Tehran may interpret foreign-flag absence as Western hostility rather than insurance market caution, and may use continued closure as justification for slowing compliance on other MOU commitments. The mine clearance timeline is the structural pacing factor for whether the MOU's 60-day Phase 2 window produces meaningful progress.

What could happen next?

Consequence
Commercial oil and LNG flows through Hormuz will remain near zero for a minimum of 40-50 days after mine clearance begins, assuming the IRGC cooperates with the process, which it has not committed to as of 18 June.
Short term · Assessed
Risk
If the P&I re-entry condition (UN resolution or government certification) is not met within the MOU's 60-day window, the strait may remain commercially closed even after the nuclear and sanctions provisions are theoretically resolved.
Medium term · Assessed
Opportunity
Coalition minesweeping operations, if authorised, would be the fastest path to insurer re-entry and commercial flow restoration; this gives the US and European navies a concrete deliverable to offer in Phase 2 talks.
Short term · Reported

Source Landscape

This story draws on neutral-leaning sources from United States

United States

Primary parallel: After the 1988 US-escorted Kuwaiti tanker re-flagging operation (Operation Earnest Will), Lloyd's of London war-risk exclusions for the Gulf remained in force for weeks beyond the formal end of Iranian mine-laying. Mine clearance, not diplomatic announcements, triggered the insurer re-entry. The 1984-1988 Tanker War established the structural pattern: insurers follow cleared water, not signed agreements.

Counter-parallel: After the 2003 Iraq invasion, Lloyd's lifted its Gulf war-risk exclusions within days of the formal cessation of hostilities because no mines were in the shipping lanes. The 2026 situation more closely resembles the 1987-88 period because the physical hazard (mines) is the trigger for insurer caution, not the political situation alone.

The insurance premium gap is the operative figure: war-risk premiums rose from 0.25% of vessel value before the conflict to 3-8%, equating to up to $8 million per transit for a large tanker. At those rates, shipping Hormuz oil adds roughly $15-20 per barrel to breakeven, pricing most low-margin crude movements out of viability even after sanctions are nominally cleared.

Mine clearance at 40-50 days minimum creates a supply-gap window where even the oil-transaction waivers written into the MOU produce no physical barrels. The UAE state oil company assessed that full Hormuz flows would not resume until 2027. At the current trajectory, the oil market's blockade-lift trade priced a supply response that is 40-180 days ahead of any physical reality.

Consensus view: BIMCO chief safety officer Jakob Larsen stated on 18 June that transits were still very risky and that the CONWARTIME clause (CONWARTIME 2004) remained legitimately triggered. The International Group of P&I Clubs issued 72-hour cancellation notices on 2 March 2026; cover evaporated on 5 March.

Neither the MOU nor the CENTCOM order meets the P&I Clubs' stated re-entry condition, which requires either a UN Security Council resolution certifying safe passage or a government-issued certification. Neither had been issued as of 18 June.

Counter-view: Iran's IRGC, via state media, maintained that it controlled passage conditions and that compliant vessels could transit. From Tehran's framing, the strait remained open for vessels that accepted PGSA passage protocols, meaning the closure is a product of Western insurance refusal rather than physical obstruction for all actors.

Key tension: Whether the P&I re-entry condition (UN Security Council resolution or government certification) can be satisfied within the MOU's 60-day window, or whether insurer caution will outlast the diplomatic framework.

Sources:CNBC·InvestingLive / BIMCO·InvestingLive / BIMCO

Mentions:BIMCO →Jakob Larsen →Iran →Tanker War →Lloyd's of London →London →Operation Earnest Will →US Navy →Iraq →Washington →Tehran →CENTCOM (US Central Command) →CONWARTIME clause →International Group of P&I Clubs →Strait of Hormuz →

First Reported In

Update #132 · Trump lifted the blockade, not the strait

CNBC· 19 Jun 2026

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Causes and effects

Caused by

500 ships idle as Hormuz stays shut

The zero new tanker transits logged after Trump's order (ID:4270) continued into 18-19 June as the mine and insurer reality persisted.

Occurred 16 Jun 2026

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This Event

Insurers and mines keep Hormuz shut

The blockade lift removed the one closure Washington controlled and left two that answer to underwriters and minesweepers, not to a presidential order.

Led to

Saudi tankers moved, Hormuz stayed shut

The three Saudi VLCCs made their first movement since the conflict began — the conflict having kept the strait effectively closed since ID:4352.

Occurred 19 Jun 2026

Read story →

Different Perspectives

United States

OFAC gazetted two wind-down licences expiring four days apart and adopted a presumption of denial for new Iran sanctions requests, while the State Department separately sanctioned Kataib Hezbollah and Hezbollah financial networks. Washington is closing legal channels on a published calendar rather than all at once.

United Arab Emirates

Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan met Iran's president in New Delhi, the first known face-to-face since the war began, weeks after cutting all Emirati trade and financial dealings with Iran. Abu Dhabi is running economic pressure and diplomatic contact at the same time.

Houthis

Houthi forces completed the capture of Yemen's Red Sea coast and Mayun island this week, an offensive a Houthi official confirmed alongside Yemeni government officers. The gain locks in the Bab al-Mandeb closure to Saudi crude declared as an embargo on 23 July.

Iran

Foreign Ministry spokesman Esmail Baghaei credited Iranian diplomacy backed by military strength for pushing neighbours to negotiate, citing the Oman safe-passage talks, while addressing none of the pipeline strike, the Iraqi dismissals or Saudi restraint directly.

Iraq

Prime Minister Ali al-Zaidi sacked two Maysan officials, closed and reopened three Iran border crossings inside three days, and approved a joint inquiry with Tehran into the launch site on his own territory. He is managing a militia network he does not fully control rather than confronting it.

Saudi Arabia

Riyadh's Foreign Ministry confirmed the Petroline strike, named no attacker, and said it would hold off retaliating at Iraq's request while reserving the right to act on its own sovereignty. It expects Baghdad's inquiry, not a Saudi strike, to be the next move.