Uncertainty hangs over ships transiting the Middle East because of regional hostilities that are quadrupling or even quintupling the cost of war risk insurance policies, Lloyd’s List is reporting.

The publication quotes Simon Lockwood of broker Willis: “Some media reports have suggested that marine war risk insurers have withdrawn all coverage. However, this is not the case currently. War risk coverage remains available.”

The notice of cancellation from the International Group of Protection & Indemnity clubs is largely a technical move, the report said, and only affects a more limited cover known as charterers’ liability risk extensions, which expired this week.

The clubs were working to get the replacement product, known as a “buyback,” in place. But the P&I clubs are being hit hard by the cost of replacement cover.

Morningstar DBRS has observed that the US Government's current insurance proposal may be insufficient to restart commercial navigation in the Strait of Hormuz.

The Trump administration proposed a government reinsurance backstop for private marine insurers, similar to the US Terrorism Risk Insurance Act, could provide a more effective mechanism to stabilise insurance markets while preserving private sector underwriting capacity.

But Morningstar said as long as the security situation remains volatile, many shipowners may remain reluctant to transit the strait even if government-backed coverage becomes available.

US Naval escort capacity has been offered but may also be limited relative to the volume of maritime traffic at this point.

The Strait of Hormuz typically handles dozens of large tankers each day. Even if convoy systems are implemented, naval resources could restrict throughput and impose slow transit times, limiting the programme's ability to quickly reduce the number of ships waiting to cross the strait.

There is also the question of whether or not the US government will risk their naval assets on the bulk of stranded vessels for which there is no US alignment for vessel or cargo.