War risk premiums fall as Strait of Hormuz traffic resumes

War risk insurance premiums for vessels transiting the Strait of Hormuz have begun to decline following a ceasefire agreement between the United States and Iran, marking a tentative easing in a market that had seen costs skyrocket during months of conflict. The gradual resumption of shipping traffic through the critical waterway is prompting a cautious softening in pricing, though insurers warn the market remains fragile and faces potentially billions of dollars in claims from vessel damage sustained during the hostilities.

According to industry reports, war risk premiums have fallen to approximately 3 percent of a vessel’s value, down from around 5 percent just days earlier and a peak surge of over 1,000 percent during the height of the crisis. This reduction translates to substantial savings per voyage. The decline coincides with a slow return of commercial shipping activity after the ceasefire announcement and a partial restoration of crude oil exports from Gulf producers.

The conflict, which escalated sharply in late February 2026, severely disrupted one of the world's most important maritime trade corridors. The Strait of Hormuz, a chokepoint for roughly a fifth of the...