The 2026 U.S.-Iran War and the Global Energy Crisis

Chapter 9: Insurance Surrendered First

9.1 The IRGC's Blockade Declaration

Monday, March 2, 2026, prime-time news on Iran's state television IRINN. Standing before the camera was Ebrahim Jabari, senior advisor to the Commander-in-Chief of the Islamic Revolutionary Guard Corps (IRGC). He wore a military uniform. His face was expressionless. And from his mouth came a single statement that froze the world's energy market.

"The strait is closed. Any attempt to pass will result in revolutionary guard and naval forces setting the vessel alight."

This declaration bore no resemblance to the rhetorical threats Iran had repeated in the past. Previously, whenever Iran faced stalled nuclear negotiations with the United States or escalating international sanctions, it invoked the Strait of Hormuz. It would disrupt tanker routes with small high-speed boats, or deploy anonymous proxy forces to attach limpet mines to ships. A so-called gray zone tactic. A method of maintaining enough ambiguity to avoid full-scale war while exhausting the adversary. In June 2019, when the Japanese tanker Kokuka Courageous and the Norwegian tanker Front Altair were struck in the Gulf of Oman, Iran officially denied involvement. Ambiguity had been its shield.

Jabari's declaration was that shield cast aside. "Any attempt to pass will be set alight." The ambiguity vanished. Only an unambiguous declaration of an act of war remained.

The declaration had context. Two days earlier, on February 28, the United States and Israel launched Operation Epic Fury. B-2 stealth bombers, Tomahawk cruise missiles, and sea-launched precision-guided munitions simultaneously struck Iran's nuclear facilities, IRGC command centers, air defense networks, and ballistic missile bases across the country. Supreme Leader Ayatollah Ali Khamenei was killed. It was the worst military shock since Iran's founding. In the chaos of the regime's symbol vanishing, the IRGC played its retaliation card: the blockade of the Strait of Hormuz.

Jabari did not stop there. That same day, a spokesman for Khatam al-Anbiya, the command overseeing the IRGC's military and asymmetric forces, appeared on multiple outlets including Al Jazeera with a more specific warning. "Not a single liter of oil will pass through the Strait of Hormuz. Every vessel associated with the United States, Israel, and their allies is considered a legitimate military target." He added: "You will not be able to artificially suppress oil prices. Expect two hundred dollars per barrel."

It was not merely declaration and warning. The IRGC was translating words into action.

From the night of February 28, the day of the bombing, every merchant ship transiting the Strait of Hormuz began receiving repeated VHF radio warnings. "No vessel can pass through the Strait of Hormuz." The UK Maritime Trade Operations Center (UKMTO) of the British Navy confirmed this broadcast and issued a major military activity alert across the Persian Gulf, Strait of Hormuz, Gulf of Oman, and northern Arabian Sea.

Physical reality was transforming rapidly. The U.S. Fifth Fleet's reconnaissance assets and commercial satellite imagery captured military movements unfolding along Iran's southern coast in real time. From Iran's naval bases at Bandar Abbas and the port of Jask, facing Oman's Musandam Peninsula, dozens of armed speedboats poured into the strait's critical choke points. These boats were small. Instead, they carried multiple rocket launchers, anti-ship missiles, and explosives for suicide attacks.

There was movement beneath the surface too. Ghadir-class and Fateh-class miniature submarines were deployed into the shallow waters of the strait. What they dispersed was not nineteenth-century contact mines. They were smart mines that recognized the magnetic and acoustic signatures of specific vessels and detonated as the target passed overhead. On March 10, U.S. military intelligence officially confirmed that Iran had begun laying mines in the Strait of Hormuz. President Trump immediately demanded their removal, and the U.S. military announced it had destroyed sixteen Iranian mine-laying vessels.

Along the coastline, ground firepower took position in the mountainous terrain. Khalij Fars anti-ship ballistic missile batteries, capable of speeds exceeding Mach 3, moved into combat positions. Hundreds of Shahed-series suicide drones, whose effectiveness was proven on the Ukrainian battlefield with low cost and high efficiency, were mounted on launch racks. The narrow corridor, thirty-four kilometers wide with an effective shipping lane of just 3.2 kilometers, became a multilayered kill zone.

The next day after the declaration, the IRGC fired two surface-to-ship missiles near a Greek-flagged empty tanker approaching the strait entrance. The missiles struck the water less than one nautical mile from the ship. A massive waterspout erupted. It was not a miss. It was a warning shot demonstrating that radar was locked on target and that the vessel could be sunk at will.

And real blood was shed.

On March 1, approximately five nautical miles north of Khasab port on Oman's Musandam Peninsula, the Palau-flagged tanker Skylight was struck by an unidentified projectile. Fire broke out in the engine room and crew quarters near the stern, releasing a massive plume of black smoke, and four Indian crew members among the twenty aboard were injured. The Oman Maritime Safety Center confirmed all personnel were evacuated. According to analysis by maritime tracking data firm Windward, the Skylight itself was a vessel subject to sanctions by the Office of Foreign Assets Control (OFAC) under the U.S. Treasury Department, part of the so-called shadow fleet smuggling Iranian oil. Iran had attacked one of its own vessels. Windward called this "not precision targeting but indiscriminate threat for area denial." Whose ship it was did not matter. Passage itself through those waters was the target of fire.

That same day, approximately fifty-two nautical miles north of Muscat, the Marshall Islands-flagged tanker MKD Vyom was struck by an unmanned drone boat laden with explosives. An explosion and fire broke out in the engine room, and one Indian crew member was killed. The vessel manager V.Ships Asia confirmed the death through statement and pledged support to the family. The Indian embassy in Mumbai issued a statement as well. All twenty-one crew members were evacuated aboard the Panama-flagged MV SAND.

On March 2, the U.S.-flagged Stena Imperative, moored at Bahrain port, was struck twice. One port worker was killed and two injured. The Iran-linked Athe Nova, attempting unauthorized strait passage, came under attack from two drones. The Tasnim news agency affiliated with the IRGC reported that the vessel "attempted illegal passage." The Gibraltar-flagged commercial tanker Hercules Star was also confirmed struck off the UAE coast.

The IRGC's attack range extended beyond the twenty-one-mile bottleneck of the strait. At 10:40 p.m. UTC on March 4, in the northernmost reaches of the Persian Gulf approximately eight hundred kilometers from the strait, the Bahamas-flagged Suezmax-class tanker Sonangol Namibe, moored near Mubarak Al Kabeer port in Kuwait, was engulfed in an explosion. A massive boom sounded along the port side of this vessel, 158,425 DWT and 273 meters long, and the captain observed a small craft departing the scene. It was an Iranian unmanned surface vessel. The hull was breached, and seawater began flooding the ballast tanks. The UKMTO warned of possible oil spillage from cargo tanks with environmental consequences. The vessel, owned by Angola's state oil company Sonangol, had been waiting to load eighty thousand tons of Iraqi-origin fuel under contract with Iraq's State Organization for Marketing of Oil (SOMO). All crew survived, but the message was unmistakable: anywhere in the Persian Gulf could be struck.

By March 8, the UKMTO had confirmed ten maritime attacks. By March 12, this had risen to twenty-one. Five sailors had lost their lives. The nationality and ownership of attacked vessels showed no consistent pattern. Sanctions-targeted tankers connected to Iran (Skylight), Western commercial tankers (Hercules Star), independent tankers under neutral flags (MKD Vyom), vessels with mixed ownership connected to Russian trade (Sea La Dona). Windward's analysis was clear: "Not precision strikes based on affiliation, but area denial effects to suppress commercial maritime traffic itself."

Iran did not conduct a conventional naval blockade with hundreds of warships arrayed in formation. It chose to devastate a small number of vessels with brutality, creating extreme terror. It was not warships that blocked the strait. It was fear that blocked the strait.

Leaders of various nations convened emergency national security councils in the dead of night. Admiral Brad Cooper, commander of U.S. Central Command (CENTCOM), said at a press conference on March 3: "Currently, there is not a single Iranian naval vessel transiting the Arabian Gulf, Strait of Hormuz, Gulf of Oman. At minimum, seventeen have been destroyed." The U.S. military was neutralizing Iran's navy. Yet the strait remained closed. Not because Iran's naval force was blockading it. A handful of drone boats, several intelligent mines, a few missile batteries hidden in coastal mountains were sufficient. And it was not burning tankers on the water that proved this sufficiency, but the insurance market in London's financial district.

9.2 War Risk Insurance's Withdrawal

Modern maritime commerce rests upon invisible infrastructure. Not steel, not fuel. Insurance.

Building a single ultra-large crude carrier (VLCC) of three hundred thousand tons costs between 120 million and 150 million dollars. The crude oil filling this vessel is worth between 100 million and over 200 million dollars depending on international oil prices. Combined, the assets moving in a single voyage total at minimum 300 million dollars, approximately 400 billion Korean won. Should this vessel be struck and hundreds of thousands of tons of crude spill into the sea, environmental cleanup costs and damages would exceed this amount many times over. No shipping company on earth would put assets of this scale to sea without insurance.

Marine insurance consists of multiple layers. Hull insurance covers physical damage to the ship itself. Cargo insurance covers loss of the crude oil or LNG aboard. Protection and Indemnity insurance (P&I) covers third-party liability, environmental damage, and crew casualties. All three layers must be intact for a vessel to move. If even one layer collapses, the ship stops.

The heart of this insurance system is in London. At 1 Lime Street in the City of London stands Lloyd's of London. This insurance market, which began in Edward Lloyd's coffeehouse in 1688, has underwritten the risks of world maritime trade for 336 years. Under Lloyd's sits the Joint War Committee (JWC), a coordinating body composed of underwriters from the Lloyd's market and the London International Insurance Association (IUA). This committee monitors oceans worldwide, designating sea areas where war, terrorism, piracy, or other threats pose high risk of vessel destruction as "listed areas."

Middle Eastern waters, including the Strait of Hormuz, were already included in this risk designation long before. Vessels entering risk areas must pay an "additional premium" (AP) above basic annual insurance, known as the war risk premium (WRP). In peacetime, this premium was 0.01 percent to 0.05 percent of vessel value. For a 150 million dollar VLCC, this meant 15,000 to 75,000 dollars. Compared to the freight revenue from a single tanker voyage, it was negligible.

From the night of February 28, when Operation Epic Fury was launched and the IRGC began issuing VHF warnings, things began to change.

On the morning of Monday, March 1, as London underwriters returned to their desks after the weekend, they immediately raised the premium upon understanding the situation. According to Lloyd's List, as of March 2, the war risk premium for vessels transiting the Strait of Hormuz had jumped to 1 percent of vessel value. In a single night, the rate had jumped twenty to one hundred times from the previous level. For a 150 million dollar VLCC, this meant 1.5 million dollars. But this was only the beginning.

Far higher rates were applied to vessels connected to the United States, Britain, and Israel. Lloyd's List reported that premiums for these vessels rose to 2.5 percent to 5 percent. For a 150 million dollar vessel to transit the strait once, the premium would be 3.75 to 7.5 million dollars.

As the first week of March passed, the premium rose higher. According to subsequent Lloyd's List reporting, the rate climbed to 10 percent of vessel value. For a five-year-old VLCC worth 138 million dollars, a single transit of the strait required paying 10 to 14 million dollars in insurance out of pocket. An amount far exceeding the freight revenue a tanker earns transporting crude. A structure in which launching the vessel guarantees losses of millions of dollars.

On March 2, something more lethal than the premium surge occurred. Major member companies of the International Group of P&I Clubs moved in concert. Gard, Skuld, NorthStandard, London P&I Club, American Club. They issued notices canceling war risk coverage for Iranian waters, the Persian Gulf, adjacent waters, and the Strait of Hormuz. The effective date specified in the notices was midnight, March 5.

One point requires precise clarification. The Lloyd's Market Association (LMA) stated in an official declaration dated March 23: "Reports continue that ships cannot transit the strait because war risk insurance has been canceled or is unavailable. This is inaccurate. War risk insurance remains available for purchase at Lloyd's and the London market." According to LMA investigation, eighty-eight percent of major Lloyd's marine war insurance participants retained the willingness to underwrite hull war risk for U.S. and British-affiliated vessels, and over ninety percent retained willingness to underwrite cargo war risk.

Insurance did not disappear. The insurance premium rose to economically unbearable levels. An irregular warfare research institute analyzed this phenomenon in three stages. Stage one: premiums spike. Costs rise but operations do not stop. The Hormuz premium jumped from 0.2 percent to 1 percent of vessel value, adding roughly 800,000 dollars per VLCC voyage. Stage two: existing coverage expires and renewal terms become harsh. When P&I clubs issue seventy-two-hour cancellation notices, shipowners must renegotiate at wildly inflated rates. According to Lloyd's List confirmation, coverage was not completely withdrawn but a 25,000 dollar annual policy was replaced by a 30,000 dollar weekly arrangement. The practical effect was identical. Stage three: when this cost exceeds the shipping company's break-even point, no one purchases insurance even if available.

The result appeared after March 5.

As news of the P&I clubs' war risk coverage cancellation spread through Reuters and Bloomberg terminals, urgent radio communications poured from the control rooms of shipping company headquarters worldwide. Maersk of Denmark, Hapag-Lloyd of Germany, CMA CGM of France, MSC of Switzerland-Italy, COSCO of China, HMM of Korea. The world's six largest container shipping lines all suspended transits through the Strait of Hormuz.

Maersk issued a statement on March 1: "We suspend all vessel transits through the Strait of Hormuz until further notice. Services calling at Persian Gulf ports may experience delays, route changes, and schedule adjustments." Hapag-Lloyd went further. "Due to official closure of the Strait of Hormuz by relevant authorities and deterioration of the regional security situation, we suspend all vessel transits through the strait until further notice. This measure is not a discretionary decision but an essential response to current conditions and regulatory constraints." CMA CGM issued an immediate "take shelter" order to all company vessels in or bound for the Persian Gulf. MSC completely halted new booking acceptance for all Middle East-bound cargo.

Hapag-Lloyd introduced war risk surcharge from March 2 for cargo departing from or arriving at the upper gulf, Arabian Gulf, and Persian Gulf. Up to 3,500 dollars per container. This cost is passed entirely to shippers.

The insurance withdrawal did not remain confined to the insurance market. It immediately transmitted to the maritime labor market. With the JWC classifying the waters as a high-risk combat zone, hazard pay became mandatory for crew members. Under the BIMCO (Baltic International Maritime Council) standard war risk clause (CONWARTIME), the captain may refuse orders to enter the Persian Gulf if he judges the risk to vessel and crew as "too high." The seafarers' legal right of refusal was activated. No amount of money a shipping company offered could compel civilian crew into combat zones.

Harry Vafias, a Greek shipowner representing a family operating approximately one hundred tankers, bulk carriers, and LPG carriers, told Lloyd's List in an interview: "Currently, there is no insurance available for transiting the Strait of Hormuz, and no one will do it. The probability of being struck is too high. You would have to be insane to attempt it without insurance."

Iran did not implement a traditional naval blockade through a massive fleet. It struck a handful of merchant vessels, scattered mines, and made declarations on television. What ultimately sealed the blockade was the calculator of insurance actuaries in London's City. A spreadsheet strangled the strait before a missile did.

Before the physical blockade even began to bite, an economic blockade made of numbers and contracts suffocated the Strait of Hormuz. An analysis by an irregular warfare research institute pinpointed the meaning of this crisis with precision. "The next chokepoint may be closed not by mines or missiles, but by an underwriter's notice of rate adjustment. Coverage exists technically, but at a price no shipowner will pay."

9.3 March 1st, the AIS Screen

Under International Maritime Organization regulations, all vessels above a certain size must keep their Automatic Identification System switched on. This device broadcasts a ship's position, heading, and speed at intervals of just seconds. Ship tracking services like MarineTraffic and Kpler gather these signals and display the flow of global maritime traffic on real-time maps. On these digital maps showing the Strait of Hormuz and the Persian Gulf, there should normally be dense tangles of vessels entering to load crude oil and departing fully laden, forming vast ribbons. Hundreds of ships per day. These tracks were vital signs showing that twenty million barrels of petroleum flowed through the economic arteries of the world every day.

On Friday night, February 28th, change began immediately after Operation Epic Fury commenced. Tankers in the Persian Gulf sought to exit the strait before conditions deteriorated. On February 28th alone, 116 vessels transited the Strait of Hormuz. The number was similar to the previous day.

On Saturday, March 1st, the number of transiting vessels fell to 72. It was not yet unprecedented, but the decline was clear. This is data from Lloyd's List Intelligence.

As night fell, the situation changed dramatically.

Shortly after midnight on March 2nd, tanker signals began vanishing from the AIS screen. Wikipedia's article on the Hormuz Crisis recorded this moment as follows: "Shortly after midnight on March 2nd, no tankers in the strait broadcast automatic identification system signals." The same article, however, noted a qualification: "The data is incomplete and based on satellite navigation systems."

After the IRGC's official blockade declaration broadcast globally on television on March 2nd, merchant traffic through the Strait of Hormuz plummeted by more than 80 percent. According to Windward's daily maritime intelligence report, not a single vessel flying the flag of the United States, United Kingdom, or EU transited the strait between March 1st and 2nd. The limited traffic that remained consisted primarily of dry bulk carriers.

With each passing day, the screen grew emptier.

On March 4th, 5 vessels transited the Strait of Hormuz. By March 8th, that had fallen to 2. Both were Iranian-flagged, and there were no inbound transits. This represented roughly one-third of the seven-day average of 5.88 vessels. But even this soon ceased.

On March 14th, Windward's daily report recorded the AIS-confirmed transit count for that day: zero in both directions. A 100 percent decline compared to the previous day. Complete emptiness compared to the seven-day average of 2.57 vessels. The report stated: "The first visible halt in commercial shipping through the chokepoint since hostilities began."

According to S&P Global Market Intelligence, only 21 tankers transited the strait from the start of the war through mid-March. Before the war, more than 100 vessels passed through daily. Lloyd's List Intelligence tallied 111 transits of cargo vessels of at least ten thousand deadweight tons during the period from early March through the third week of March. Of these, 78 were eastbound, leaving the Persian Gulf, and 33 were westbound, entering it. Most of the westbound traffic consisted of sanctioned or shadow fleet vessels.

By flagging, transiting vessels were 26 percent Iranian, 17 percent Greek, and 9 percent Chinese. More than 60 percent of total traffic consisted of vessels connected to Iran,whether Iranian-owned, Iranian-flagged, sanctioned, part of shadow fleets, or calling at Iranian ports,or vessels transiting with Iranian permission. The remainder were so-called "dark transit" vessels attempting to pass through under cover of darkness with their AIS transponders switched off.

By mid-March, Windward detected by satellite 8 large "dark ships" of 290 meters or more operating with AIS transponders off near the strait. One was a U.S.-sanctioned vessel spotted near Khor Fakkan port in the UAE on March 16th before switching off its AIS and disappearing. A tanker estimated to have loaded about one million barrels of crude at Saudi Arabia's Ju'aymah terminal around March 4th transited the strait with AIS disabled, then switched its signal back on at 7 a.m. UTC on March 9th, five days later. A handful of adventurous shipowners were gambling in the darkness, betting on dramatically elevated freight rates.

But where had all the vessels gone that could not enter the strait?

According to CNBC, roughly 400 vessels were waiting in the Gulf of Oman. Splash247 reported that more than twenty thousand seafarers were stranded on both sides of the strait. Off the coast of Fujairah on the UAE's eastern shore, tankers, LNG carriers, and container vessels that had given up on entry lay anchored, covering the sea. According to Lloyd's List analysis, approximately 140 container vessels were trapped inside the Persian Gulf, carrying between 460,000 and 470,000 TEU (Twenty-foot Equivalent Units). This figure included 15 vessels from MSC (totaling 109,000 TEU), 14 from Maersk (70,000 TEU), and 2 large vessels from COSCO.

This fleet, feet stuck to the sea, burning through enormous fuel costs and demurrage fees, floated within striking range of drones and missiles whose arrival time remained unknown. Assets worth hundreds of billions of dollars hung suspended in this danger. Qatar declared force majeure on LNG exports on March 5th. It meant that 20 percent of global LNG supply could evaporate in an instant. Spot LNG shipping rates jumped tenfold, from thirty thousand dollars per day to three hundred thousand.

The effect of the Strait of Hormuz shutting down spread instantly beyond the digital screen, flowing through the capillaries of the real economy. Crude oil is extracted, loaded onto tankers, and arrives at Asia's refineries after a voyage of roughly one month. For oil to continue flowing from the end of the pipeline, new tankers must constantly enter through the gateway of the strait. The empty AIS screen in early March was a schedule predicting that Asian refineries' storage tanks would run dry one month later.

Phones rang off the hook in the crude procurement departments of refineries in Ulsan and Yeosu, Korea; Kawasaki, Japan; and Ningbo, China. Traders scoured global markets seeking to secure American shale oil, North Sea Brent, and West African crude. With a supply chain handling 27 percent of global maritime crude trade simply vanished, finding replacement barrels was mathematically nearly impossible.

International crude prices responded. Brent crude, which had traded at roughly 65 dollars per barrel before the war, breached 100 dollars on March 8th. This was the first time in four years since 2022. A rise of approximately 40 percent compared to prewar levels. Oil continued climbing until it reached 126 dollars per barrel. Analysts called it the largest supply disruption in global oil market history since the energy crisis of the 1970s.

Japanese Prime Minister Takaichi Sanae announced that approximately 70 percent of Japan's oil imports passed through the Strait of Hormuz and that his nation would begin releasing strategic reserves. EU High Representative for Foreign and Security Policy Kaja Kallas pointed out that 85 percent of oil and gas transiting the strait was destined for Asian nations. President Trump declared on March 12th that the U.S. Navy would escort tankers through the strait, and on March 15th demanded that nations using the Strait of Hormuz provide direct military protection for the route.

But reality told a different story. German Defense Minister Boris Pistorius said, "This is not our war. We did not start it." Sixteen nations,Germany, Spain, Italy, Estonia, the United Kingdom, Australia, South Korea, and Japan,rejected Trump's request to join a naval coalition. Trump condemned this as "a very foolish mistake" and shot back, "The United States needs no one's help." Later, he called NATO "cowards" and mocked it as "a paper tiger without America."

On March 19th, the United States commenced an air campaign to reopen the Strait of Hormuz. It dropped GBU-72 5,000-pound bunker-busting bombs on underground missile bunkers positioned along the Iranian coast. An additional 2,500 Marine personnel were deployed to the Middle East. The fact that these were amphibious assault-trained units sparked speculation about a possible assault on Kharg Island, Iran's largest oil export terminal. On March 26th, Israel announced it had killed Alireza Tangsiri, the IRGC Navy commander directing the blockade, in an airstrike. Israeli Defense Minister Israel Katz stated that Tangsiri bore "direct responsibility for the blockade of the strait and acts of terror bombing."

The day after Tangsiri's death, March 27th, the IRGC did not back down. Instead, it expanded the blockade. "All vessels transiting to and from ports of the United States, Israel, and their allies are barred from the strait." That same day, two Chinese-flagged vessels were intercepted by Iran as they attempted to enter the strait. The Thai-flagged bulk carrier Mayuree Naree ran aground on Qeshm Island.

Iranian Foreign Minister Abbas Araghchi announced on March 26th that vessels of five nations,China, Russia, India, Iraq, and Pakistan,would be permitted to transit the strait. Malaysian and Thai vessels were approved for passage following consultations with Iranian President Masoud Pezeshkian. On March 27th, Iran accepted a UN request and permitted transits of humanitarian cargo and fertilizer carriers. This measure reflected concern about the impact on global food production if fertilizer supplies were cut off during the spring planting season.

India, meanwhile, acted independently. Between March 14th and 24th, five Indian-flagged LPG carriers transited the Strait of Hormuz under escort by Indian Navy destroyers, then proceeded toward India after joining up in the Gulf of Oman. Operation Sankalp was the name given to this deployment. On March 15th, the Pakistani-flagged Aframax tanker Karachi transited the strait with AIS switched on, carrying crude loaded in Abu Dhabi. According to MarineTraffic records, this was the first instance of a non-Iranian commercial vessel transiting the strait with AIS active since the war began. The Liberian-flagged Suezmax tanker Shenlong, operated by Greek firm Dynamis Tankers Management, also transited the strait around March 8th carrying approximately one million barrels of Saudi crude before arriving in Mumbai, India.

These individual transit cases demonstrated that the strait was not physically sealed entirely. However, they represented exceptional passages by vessels that had obtained Iranian permission, flew the flags of nations friendly with Iran, had military escort, or attempted the gamble in darkness with AIS disabled. For the vast majority of commercial vessels, Western-affiliated ships, and uninsured vessels, the strait remained closed.

According to Lloyd's List Intelligence, China-affiliated vessels made only 11 transits of the strait between March 1st and 15th. Most were general cargo ships, and tankers were rare. China maintained friendly relations with Iran while negotiating safe passage for crude tankers and Qatar LNG carriers. However, on March 12th, a Chinese-owned vessel heading from the Middle East Gulf to Jebel Ali broadcast "China Owner" on its AIS as it transited, only to be hit by shrapnel. This incident discouraged subsequent Chinese vessel transits.

U.S. Treasury Secretary Scott Bessent announced that the Development Finance Corporation and insurance firm Chubb would launch a twenty-billion-dollar reinsurance support program to address insurance issues for vessels transiting the strait. President Trump declared via social media that the DFC would "provide reasonably priced political risk insurance and guarantees for vessels of all nations." However, Moody's credit rating agency assessed that the program, lacking liability cover, would fall short of resolving the shipping blockade of the strait. UK Treasury Secretary Rachel Reeves met with Lloyd's Chairman Charles Roxburgh to discuss maritime insurance support measures.

Despite all these moves, the AIS screen of the strait showed little change. A timelapse video created by Euronews from MarineTraffic data between March 25th and 26th showed only a handful of tankers (in red) and cargo vessels (in green) carefully threading through the strait. The shipping lanes, once as dense as a city road during rush hour, now appeared as empty as a rural highway at dawn.

A report by Columbia University's Center on Global Energy Policy summarized the situation as of March 11th: "This vital passage is effectively closed to tanker traffic, stranding almost a fifth of world supplies of crude oil, oil products, and liquefied natural gas."

An empty AIS screen. A 21-mile waterway that carried twenty million barrels of petroleum daily lay silent. Hundreds of ships drifted isolated at sea. Tens of thousands of seafarers were trapped. Insurance surrendered. Oil prices hit 126 dollars per barrel. The main artery of the world economy had been severed. This is the record of March 2026.

The strait was not physically destroyed. Its floor was not holed, nor was a giant barrier erected. Water depth remained 60 meters. Width remained 34 kilometers. Water still flowed. Only ships stopped flowing. A handful of drone boats, a few intelligent mines, one television declaration, a few rate adjustment notices from insurers. With these, one-fifth of the world's petroleum supply halted.

What this truth tells us is one thing: the energy supply chain of the modern global economy appears vast, but the pillars supporting that vastness are surprisingly thin. A 21-mile waterway, one line of insurance contract language, and the fear of shipowners and seafarers. If these three collapse, everything else collapses with them.

The ship icons that vanished from the AIS screen after midnight on March 1st. The emptiness revealed more than just the absence of vessels. It compressed into a single screen the depth of modern civilization's dependence on oil, the narrowness of the physical pathway that dependence traverses, and the fragility of the systems that attempt to protect that narrow route.

Lawyer Kim Kyungjin, AI Policy Expert

Specialist in AI Law and Policy · Former National Assemblyman · Author of numerous books

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