Strait of Hormuz Closure May Be Extended, Challenging Previous Assumptions

FOR MANY years, shipowners on panels and quarterly calls have been asked: What happens if the Strait of Hormuz closes? The response was almost always the same: if it ever happens, the closure will be brief, because the world cannot afford for it to be long.

Now that the strait is effectively closed, this response looks like a failure of imagination. An extended closure — from a practical, commercial perspective — now seems plausible.

War risk insurance costs for a Hormuz passage are high, as was the case during the Red Sea crisis. And more immediately, the risk to seafarers and vessel assets

On day six of the Middle East war, hope of a swift reopening of the Strait of Hormuz is fading. There does not seem to be a quick fix.