The number that shut the Strait

Iran has never formally declared a complete closure of the Strait of Hormuz.

As of 15 March, its foreign minister was still saying the waterway remains open to international maritime traffic – with one caveat: US and Israeli-linked vessels would be treated as military targets. Several ships have managed to transit, including Indian LPG carriers, a Turkish vessel and some Chinese-linked tankers.

And yet transit volumes have collapsed from roughly 153 vessels per day before the conflict to around 13. The practical effect is the same as a closure for the vast majority of Western commercial shipping.

Two mechanisms are responsible. The first is the obvious one: Iran has attacked ships. At least 21 vessels have been struck or damaged, and five crew members have been killed. The second is less discussed but arguably more consequential: the insurance market withdrew.

Before the first US-Israeli strike on Iran, transiting a $100m tanker through the Strait cost a shipowner roughly $25,000 in additional war risk insurance per voyage. Within 48 hours it was $100,000. By 11 March it was $250,000 for a standard vessel – and $500,000 for any ship with US or UK connections. On 5 March, the major P&I clubs cancelled cover altogether for certain categories of transit.

At those levels, most commercial operators stopped moving cargo without needing to be told to.

This matters because it explains why the disruption has propagated so quickly beyond oil – into fertiliser, chemicals and the supply chains explored in this issue. The Strait has not been fully blockaded. For most of the world’s commercial fleet, it has been priced shut.