Ships Navigate Strait of Hormuz Amid Rising Risks and Costs

Ships attempting to cross the Strait of Hormuz are increasingly needing Iranian clearance due to rising risks and surging insurance costs.

Thailand's Bangchak Corporation reported one of its oil tankers successfully passed after talks with Iranian authorities, while another awaits approval. Recent attacks have led shipowners to reconsider whether to enter the waterway at all.

War risk insurance rates have jumped from 0.15% to 10% of hull value, making transits significantly more expensive. For a $100 million vessel, this could add millions in costs.

Some companies are avoiding the strait entirely, while others are altering routes and sailing closer to the Iranian coast. Pipelines offer partial alternatives, but most exports still rely on the waterway.

Analysts warn that prolonged instability could trigger a global energy supply shock, with prices rising as supply tightens and demand is affected.