How Insurance Companies, Not Iran, Closed the Strait of Hormuz

Everyone assumes Iran can seal off the Strait of Hormuz. That’s not what happened. Instead, London-based insurers withdrew coverage and froze shipping. On a normal day, about 107 cargo ships pass through this vital oil artery. Last week, just 19 ships crossed—an 81% drop—with no missiles in sight. All it took was one spreadsheet. Roughly 90% of the world’s vessels rely on a dozen maritime insurance clubs and their reinsurers, largely in London. When war risks spike, reinsurers pull out. No insurance means no sail—and trade grinds to a halt. The fallout hits Iran first, blocking its exports. China and Gulf producers bear the cost next. This episode shows modern geopolitics is driven less by navies and more by risk models and financial systems.

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