Iran Weaponized the Marine Insurance Market to Close the Strait of Hormuz
By Bleakley Platt Partner John Diaconis and Associate Joshua Paltrineri
Iran used its knowledge of the marine insurance market to close the Strait of Hormuz. Following air strikes from the United States and Israel on February 28, 2026, the most impactful and consequential response came from underwriters. Within roughly two days, major marine insurers exercised seven-day cancellation clauses. War-risk premiums for the Strait of Hormuz skyrocketed as the region was designated a war zone. The collapse of traffic through the strait preceded any large-scale military action by Iran to enact a physical blockade or lay mines in the strait. None of the ceasefires restored normal pricing. Insurance premiums track risk. The severe risk to the safety of the vessels and their crews keeps the strait largely closed.
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