Marine Insurers Reassess Middle East Coverage as Conflict Raises Shipping and Oil Risks

Marine insurance companies are weighing whether to cancel or reprice coverage for vessels operating in the Middle East after US and Israeli strikes on targets inside Iran triggered retaliatory missile attacks across the region, according to a report by the Financial Times.

Industry brokers say premiums for ships transiting Gulf waters could rise by as much as 50 percent as parts of the region are increasingly viewed as a war zone. The heightened risk has prompted ship owners to consider rerouting vessels away from the Strait of Hormuz, a narrow maritime corridor through which about 20 percent of the world’s oil supply passes.

Any disruption to traffic through the strait could have immediate consequences for global energy markets. Traders are already anticipating upward pressure on oil prices amid fears that prolonged tensions could interrupt supplies from one of the world’s most critical energy hubs.

Air travel across the Middle East has also been severely affected. Several countries closed their airspace fully or partially, while regional and international airlines suspended or rescheduled flights. The disruption followed reports of multiple large explosions in Tehran on March 1 after Israel announced what it described as a preemptive strike.

In a video address, US President Donald Trump said the United States had launched “major combat operations” in Iran, stating that the objective was to defend Americans by neutralizing what he called an imminent threat from the Iranian government.

Airlines quickly adjusted operations, suspending services to several destinations across the region as security concerns mounted. Aviation authorities warned that schedules remain subject to sudden change depending on developments.

The latest escalation comes at a time when global shipping lanes were already under strain. Major shipping companies had been diverting vessels away from the Red Sea and the Suez Canal due to earlier security threats, instead routing ships around the Cape of Good Hope. The longer route increases transit times and fuel costs, adding pressure to global supply chains.

With marine insurers reassessing risk exposure and airspace closures spreading, concerns are growing about the broader impact on trade flows. Analysts say sustained instability could affect not only oil shipments but also container traffic, food supplies, and manufactured goods moving through the region.

Energy markets remain on alert for any sign that oil exports could be curtailed, while shipping operators and airlines continue to monitor the situation closely as military activity reshapes transportation routes across the Middle East.