From Hormuz Closure to Cautious Reopening: What Marine Insurers Are Facing

With the U.S.-Iran memorandum of understanding now signed electronically by both presidents and in effect as of Wednesday, June 17, 2026, the maritime industry is entering a phase of cautious reopening. Windward hosted an executive briefing to analyze the implications for the marine insurance market. While stranded ships have started their engines, the current atmosphere is characterized by caution rather than a rush, as insurers and owners work through the transition from a four-month blockade to a tentative restart.

At a Glance

• The Strait of Hormuz is transitioning from a multi-month closure to a cautious reopening following the signed U.S.-Iran MOU, now in effect.
• A 60-day toll-free transit window is confirmed in the MOU text. But the post-window fee structure is now actively contested: Iran has signaled it will define a new regime with Oman and charge service fees, cutting against the U.S. position that the strait would be permanently toll-free.
• Sanctions risks persist: toll or service-fee payments and safe-passage guarantees from sanctioned entities carry significant exposure. The U.S. naval blockade has been authorized for immediate removal under the agreement.
• Operational caution remains high due to a 30-day demining commitment and the memory of the April 18 failed reopening attempt.
• War risk underwriters are actively managing the constructive total loss (CTL) clock, with many vessels approaching the 6-month or 12-month detention thresholds.

The Operating Picture

As the Strait of Hormuz reopens, the marine insurance market is working through a transition with little modern precedent. Underwriters are pricing policies amidst a cautious return to traffic, working through evolving legal exposure as the U.S. blockade is removed.

The number of visible AIS transits has collapsed, and on many routes, they are outnumbered by dark transits. Over May 2026, Windward tracked 156 transits through the Strait, 22% of which were dark, with the inbound and outbound breakdown roughly even. The June 1 to 7 window saw 51 transits, 27% of which were dark. As of June 9, roughly 530 cargo ships and tankers were signaling west of Hormuz via AIS, with an estimated 200-plus dark vessels in the same waters, including approximately 50 VLCCs stuck there. In the days immediately after the agreement was announced, movement remained minimal: only a handful of vessels had transited, with hundreds still holding on either side.

The early picture is incremental flow, not normalization.

The Toll Question: Window Set, After-Window Disputed

The signed MOU resolves the near-term toll question and reopens the longer one. Iran has agreed to safe passage with no charge for 60 days only. What happens after that window is now contested: Iranian officials have indicated they will establish a new management regime for the strait alongside Oman and charge fees for services, a position that runs against the U.S. characterization of the strait as permanently toll-free. The fee structure beyond 60 days is an open question heading into the final negotiation period. Mark Church, Head of Sanctions Function at NorthStandard, noted that any vessel paying a toll to a sanctioned entity faces significant risk.

The U.S. has made the position unambiguous through OFAC alerts and Frequently Asked Questions issued in early May 2026, and it extends beyond toll payments. Per OFAC’s most recent guidance, even where no payment has been made, if a shipowner has received a guarantee from Iran for safe passage, that itself can create sanctions exposure for both the owner and any insurer providing cover. The Persian Gulf Strait Transit Authority, established by Iran to collect tolls, has been sanctioned by OFAC. The IRGC, which controls passage, is one of the most heavily sanctioned entities globally, subject to U.S., EU, and UK designations.

The implication for P&I clubs and war risk underwriters is operational. A vessel that has paid a toll, or that has received an Iranian safe-passage guarantee, cannot be insured by any P&I club or war risk underwriter. There is no gray area on this point. If Iran’s planned service-fee regime routes payments through sanctioned entities once the free window closes, that exposure question reopens directly.

What Has Not Yet Been Resolved

Several questions remain unanswered, and the panel returned to them throughout the briefing.

The first is war risk premium allocation. David McKie, Partner at Preston Turnbull, noted that most modern charter parties have provisions allocating additional war risk premium costs between owners and charterers, typically through BIMCO clauses including CONWARTIME 2013 and 2025, and VOYWAR. Owners generally seek to pass these costs to charterers, with subtle differences between clause editions that can affect the result. Practical problems sometimes arise around evidence quality, particularly whether premium increases being passed on can be clearly demonstrated as area-specific or whether they reflect blanket policy adjustments. Brokers’ detailed premium breakdowns can be important for owners seeking to recover these costs. Some voyage charter clauses require war risk premium payment until the vessel leaves the war risk area after voyage conclusion. With vessels trapped in the Arabian Gulf for months, these clauses were probably not designed for this length of delay, and questions of frustration or force majeure on those obligations are likely to surface.

The second is stranded-vessel exposure and the constructive total loss clock. Many war risk clauses set a 12-month detention period before a constructive total loss claim can be made, with a few policies still operating on a 6-month period. David McKee observed that what was a nebulous inquiry at the outset is becoming materially real for both insureds and insurers, as they assess whether vessels stranded in the Arabian Gulf may be declared as constructive total losses even without sustaining physical damage. 

Insurers are now actively assessing whether vessels stranded in the Arabian Gulf may end up declared as constructive total losses even without sustaining physical damage. Loss of hire claims are also starting to come through. Not every loss of hire policy will respond without physical loss or damage, though some will cover blocking and trapping risks.

The third is the question of how vessels stranded in the Gulf are being repurposed or sustained. Some are now engaged in local trade or shuttle operations that do not require Hormuz transit, which can continue under standard P&I and hull cover provided no sanctioned cargo is involved. Others remain at skeleton crew levels, which itself creates compliance and operational risk for both vessel and insurer. Prolonged warm-water mooring also creates marine growth and maintenance issues that may surface in future hull machinery claims.

The 30-day OFAC waivers for Russian oil cargoes already at sea, issued in response to oil price pressure, illustrate the tension. The waivers technically benefited vessels carrying cargo that would otherwise have breached sanctions, exposing the inherent conflict between maintaining sanctions pressure on Russia and Iran and managing domestic political pressure from elevated energy prices. The UK and EU have continued reducing the Russian oil price cap, while the U.S. has not followed suit, and the EU’s 21st sanctions package is expected to freeze rather than continue reducing the cap to avoid the politically difficult position of formally raising it.

What Comes Next

While the U.S. blockade is being removed, demining operations to clear the Traffic Separation Scheme remain a key gating factor for a full resumption of traffic. The MOU sets a 30-day window for demining to begin, but a verified mine-free corridor is estimated to take roughly two months, and full clearance considerably longer. The first wave of commercial movement is already forming, led by energy commodities destined for India and China, and shuttle tankers are already positioned in the region.

What This Means for Underwriting Now

For P&I clubs, war risk underwriters, and brokers operating in this environment, three operational priorities follow from the briefing.

The first is intelligence quality. AIS-only visibility is no longer sufficient. The vessels exhibiting the highest risk in the current environment are also the most likely to operate dark or under guarantees that themselves carry sanctions exposure. Multi-source intelligence fusing AIS, satellite imagery, radio frequency signals, vessel registry data, flag and ownership data, and port data into a single verified picture is what makes real-time pricing decisions possible in the current environment.

The second is sanctions exposure mapping at the portfolio level. Toll payments, Iranian safe-passage guarantees, and the broader behavioral signatures associated with sanctioned trade now sit close enough to mainstream maritime operations that exposure can travel through indirect routes. 

Want the complete expert discussion on tolls, sanctions exposure, stranded-vessel risk, and the operational picture in the Strait? Watch the full executive briefing on demand here.