How Iran's Requirements Condition Insurance for Ships Crossing Hormuz
Having insurance is no longer enough for oil tankers that want to cross the Strait of Hormuz, as authorization from the Islamic Revolutionary Guard Corps of Iran has become a prerequisite for insurers when deciding which ships to cover. EFE Information such as the flag, the interests of the shipping company or the cargo are data that are currently required to quote war risks," explains Aon, the insurance and professional services company broker. Nannette Wong, head of Aviation, Transport and Logistics at Aon Spain, explains to EFE that, even when a risk apparently does not involve interests of countries opposed to Iran, "it would not be exempt from being attacked by mistake."
TL;DR
- Iran's Revolutionary Guard authorization is now a prerequisite for insurers covering oil tankers in the Strait of Hormuz.
- Insurers use this authorization as a risk mitigation factor, classifying ships with compliance as lower risk.
- War risk insurance premiums have increased by 200% to 1000% due to heightened tensions, making journeys economically unfeasible.
- The Persian Gulf and Sea of Oman are now considered "maximum risk" areas, impacting insurance coverage.
- The closure of Hormuz and increased risk classifications led to a complete halt in the daily traffic of approximately 40 oil tankers.
- A two-week truce has had no effect on the shipping insurance market, and premiums will take time to decrease.
- Ship insurance covers hull, third-party liability (including crew, cargo, and pollution), and war risk.