The world’s largest marine insurers say traffic through the Strait of Hormuz remains far from returning to normal levels. The assessment comes as regional tensions persist, despite recent diplomatic efforts to ease the situation.
Lloyd’s of London, the leading marine insurance market, has maintained its cautious stance on vessels transiting the area. The strait, a critical chokepoint for global oil shipments, has seen fluctuating security conditions over the past year. Insurers point to ongoing risks such as piracy, military drills, and unpredictable regional conflicts as factors keeping premiums elevated.
A senior executive at Lloyd’s, who requested anonymity, stated that while there has been a slight reduction in reported incidents, the overall risk profile has not improved significantly. "The situation is still fragile," the executive said. "We are monitoring developments closely but cannot yet adjust our risk models."
The Hormuz Strait accounts for nearly 20% of the world’s daily oil consumption. Disruptions there could have global repercussions, including higher fuel costs and supply chain delays. Shipping companies have already rerouted some vessels around the Cape of Good Hope to avoid the strait, adding days to voyages and increasing costs.
Insurers are not the only ones watching closely. Oil traders and shipping firms are also adjusting their strategies. Some have opted for longer routes while others are negotiating higher insurance premiums to maintain operations through the strait. The uncertainty has led to a cautious approach across the industry.
Source: e24.no