The real next move in the Iran-Israel conflict is not a final battle for the Strait of Hormuz. It is a shipping-insurance and enforcement squeeze that forces reluctant governments to choose sides. As CBS News has reported, Iran has lashed out with missiles while Israel and the United States signal no let-up. Through the strait flows about one-fifth of the world’s oil and a large share of LNG. When insurers cancel war-risk cover and Iran selectively allows or blocks passage, every country that depends on that waterway is pulled into the contest.
Insurance and enforcement have become the real lever
Iran has not declared a formal blockade. Instead, the Islamic Revolutionary Guard Corps issued VHF broadcasts on February 28, 2026, declaring passage “prohibited” after U.S. and Israeli strikes. Traffic through the strait collapsed. According to Reuters and industry reports, daily transits fell from over 153 vessels to roughly 13 in some 24-hour periods. Major marine insurers including Gard, Skuld, NorthStandard, the London P&I Club, and the American Club cancelled war risk coverage for the Gulf effective March 5, 2026. Hull war risk premiums for tankers jumped from around 0.25% of vessel value to as high as 3%—for a $250 million tanker, that is a rise from about $625,000 to about $7.5 million per transit. The Strait became the world’s most expensive shipping lane. The squeeze works because insurers, not just navies, enforce risk. No cover means no transit for most operators, which is exactly the leverage Iran and the conflict create.
Governments are being dragged into choosing sides
Reluctant capitals are being forced to act. President Trump has demanded that allies—including France, China, Japan, South Korea, and Britain—help secure the strait. The European Union is weighing expanded naval operations in the Persian Gulf or a “coalition of the willing.” China has held talks with Iran to secure safe passage for Chinese-owned vessels and crude carriers; CNBC and Reuters reported that Iran is selectively allowing some ships through, with Chinese affiliation functioning as an informal pass. Eleven China-linked vessels transited in the first half of March. By contrast, ships linked to the U.S., Israel, and European allies face exclusion. Qatar shut down gas liquefaction and declared force majeure on LNG shipments after attacks on its facilities. Iraq, Saudi Arabia, the UAE, and Kuwait have struggled to load and export oil. The Gulf Cooperation Council invoked Article 51 for collective self-defense and activated joint air defence. The squeeze is not only about who can sail; it is about which governments will escort, which will negotiate with Tehran, and which will be seen as neutral or aligned.
The economic shock is the pressure mechanism
Roughly 150 to 200 vessels were stranded at anchor at the height of the disruption. At least nine commercial vessels were damaged by drones, mines, or projectiles. VLCC rates from the Middle East to China reached $423,736 per day. Brent crude surged; at one point it topped $126 per barrel before settling around $100. Qatar’s LNG halt and the drop in oil transits have pushed European gas prices and global freight costs higher. As CBS News and others have documented, the disruption is not a side effect of the war—it is the mechanism. Iran’s new Supreme Leader has vowed to keep the strait under pressure as “a tool to pressure the enemy.” The endgame is not necessarily to hold the waterway forever; it is to make the cost of the conflict so high that Washington, its allies, and energy-dependent states are forced to the table or into open confrontation.
What This Actually Means
Hormuz is the leverage test. Iran is using asymmetric tools—mines, fast-attack craft, anti-ship missiles, and the threat of strikes—plus the insurance market’s reaction to create a de facto closure. The result is that governments that would prefer to stay out are being pulled in: either they help secure the strait (and thus align with the U.S. and Israel), or they cut deals with Iran for passage (and signal neutrality or alignment with Tehran), or they absorb the cost of rerouting and higher prices. There is no stable middle ground. The real next move is not a single naval battle; it is this ongoing squeeze that forces that choice. Until one side or the other backs down or a diplomatic off-ramp appears, the shipping-insurance and enforcement squeeze will keep dragging reluctant governments into the conflict.
What is the Strait of Hormuz and why does it matter?
The Strait of Hormuz is the narrow waterway between the Persian Gulf and the Gulf of Oman. Iran lies on the north coast; on the south is the Musandam Peninsula, shared by the United Arab Emirates and Oman. The strait is about 104 miles long, with width varying from about 60 to 24 miles. An estimated 20 million barrels of oil per day passed through it in recent years, along with a large share of global LNG. There is no practical alternative route for Gulf oil and gas to reach global markets at scale; the only workaround is the long and costly reroute around the Cape of Good Hope, which major carriers including Maersk, MSC, Hapag-Lloyd, and CMA CGM have used since the crisis began. Control or disruption of the strait therefore gives Iran outsized leverage over energy prices and over every country that depends on that flow.
Who is being forced to choose?
European states are weighing U.S. requests to help open the strait while seeking clarity on war aims. China is negotiating with Iran for safe passage for its vessels and gets a large share of its oil via the strait. Gulf Cooperation Council members—Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain, and Oman—have been hit by Iranian strikes on energy and port infrastructure; they have moved toward collective self-defense and closer alignment with the U.S. Japan’s MS&AD Insurance Group suspended war risk underwriting in the region. Shipowners and charterers worldwide are deciding whether to pay prohibitive premiums, seek naval escort, or reroute. Each of these actors is being pulled into a choice that the conflict, and the insurance and enforcement squeeze, has made unavoidable.
Sources
CBS News, Reuters, CNBC, Reuters, Reuters, Foreign Policy, Insurance Journal