Geopolitical uncertainty has become the single biggest risk hanging over the shipping industry, with vessels and cargo worth roughly $125 billion still stranded in the Persian Gulf, waiting for transit through the Strait of Hormuz to resume. The closure of the strait is just the latest in a run of disruptions to batter global shipping.
The developments point to a "new maritime order": escalating security risks along the world's most strategic shipping corridors, established trade routes thrown into disarray, persistent uncertainty, higher risk premiums, and a renewed emphasis on resilience over cost efficiency. This shift has left owner-managed firms and exporters watching freight costs climb, a stark reminder of how quickly a distant conflict can land on the balance sheet at home.
According to data, around 1,150 cargo-carrying vessels and as many as 20,000 seafarers are currently stuck in the Gulf. Behind the headline figure sits a human one: crews who have spent months on board, facing the constant threat of attack and the mental strain that comes with it.
The industry has gone from decades of relative calm, with steady trade flows and largely predictable operating conditions, to a far more complex and volatile environment. "The Middle East conflict and Strait of Hormuz closure is just the latest in a series of severe interruptions to hit shipowners and cargo operators," said Thomas Lillelund, chief executive of the insurer. "Resilience, geopolitics, and efficiency must be balanced in an increasingly unpredictable world, where the cost of uncertainty is reshaping the shipping industry."
The strait matters far beyond the insurance market. It is considered the world's most important oil transit chokepoint, carrying around a fifth of global petroleum liquids consumption, with very few alternative routes if it closes. This has already pushed oil prices close to $120 a barrel and has led to warnings of a 1.8 million barrel-a-day shortfall this year.
The insurer stressed that marine insurance has remained available throughout the conflict, albeit at higher hull and cargo premiums. However, the bigger problem for shipowners has been less about insurance and more about the basic risk to vessels and crews when sailing through an active conflict zone.
Even if the US and Iran peace agreement holds and the strait reopens, owners will want firm assurances of safe passage, especially if traffic is to return to pre-war levels of up to 140 vessels a day. "The closure of the Strait of Hormuz sets a dangerous precedent and raises questions around the long-term future of this and other critical chokepoints," said Captain Rahul Khanna, global head of marine risk consulting. "What is becoming clear is that we have to pay a price for uncertainty, shifting from 'just-in-time' to 'just-in-case' supply chains, and prioritising resilience over cost efficiency."
The lesson for UK firms is uncomfortably familiar. The pandemic, the Suez blockage, and the Red Sea attacks each exposed how exposed lean, just-in-time supply chains can be, and the Gulf crisis is now adding fresh insurance and freight costs to goods that have barely left port. Resilience, once treated as an optional extra, is fast becoming a competitive necessity, which is one reason a growing number of smaller exporters are rethinking their routes to market and diversifying their sales channels to spread the risk.
The full picture is set out in the insurer's Safety and Shipping Review, which notes that, even as long-term safety records improve, the structural risks facing global trade are intensifying. For an industry that has long competed on cost, the price of certainty is suddenly the figure that matters most.
