Global insurers are starting to pull war risk coverage for sections of the Middle East following a recent military escalation in the Gulf. This action signifies a significant reduction in the willingness of reinsurers to provide coverage and has introduced new unpredictability for shipowners and charterers operating in the area.

Major Protection and Indemnity (P&I) Clubs, including Gard, Skuld, NorthStandard, West of England P&I Club, and the American Club, have formally announced cancellations for specific war risk policies. The majority of these cancellations will become effective at 00:00 GMT on March 5, 2026, adhering to the typical 72-hour notice period. The affected areas include Iranian territorial waters, extending up to 12 nautical miles offshore, and the broader Persian/Arabian Gulf, encompassing the Gulf of Oman. These measures primarily impact non-mutual, fixed-premium insurance products like Charterers' Liability and extended covers that are not part of the pooling arrangement. Essential mutual P&I coverage for shipowners remains active but is subject to ongoing assessment.

The discontinuation of annual coverage does not signify a complete absence of insurance. Instead, it leads to a substantial increase in costs. Market projections indicate that marine hull insurance rates for voyages through the Gulf could increase by 25% to 50%, with some instances potentially seeing rates double. Several clubs are facilitating the reinstatement of coverage through voyage-specific "buy-back" options, which offer limited protection at significantly higher premiums. Insurance has now become a critical factor in transit operations.