MAJOR trading houses are halting shipments through the Strait of Hormuz amid threats from Iranian naval forces to shipping and the US and Israel war with Iran.

Iranian forces have been hailing commercial vessels near the Strait of Hormuz since missile strikes started on Saturday. The message, reviewed by Lloyd’s List and described by tanker and security officials as credible, have repeatedly declared the key waterway as being closed to shipping. 

No official announcement has been made by the Iranian government, which has responded to US and Israeli strikes with attacks across the Middle East.

Several senior traders have independently told Lloyd’s List that they view these warnings as credible threats from the Iranian government and do not expect any shipments through until tomorrow at the very least. 

One senior trader told Lloyd’s List that they expect key trading houses and oil majors will keep their ships away from the strait. 

Reuters has separately cited a senior executive at big trading desk stating their ships “will stay put” for a few days. 

Lloyd’s List Intelligence Automatic Identification System showed multiple vessels making U-turns in the Middle East Gulf and Gulf of Oman on Saturday, yet others continued to sail through the Strait of Hormuz even as reports of Iranian warnings to shipping were circulating. 

Meanwhile, a tanker was also observed making a U-turn near the Bab el Mandeb on Saturday amid fears of Houthi attacks on commercial shipping. 

It was not immediately clear if any tankers were transiting the Strait of Hormuz with their AIS switched off.

Roughly a third of global seaborne crude flows transit the Strait of Hormuz, making it the central pressure point in any escalation scenario.

Despite the heightened threat to shipping and radio threats from Iran, a full closure of the strait continues to be regarded as a low-probability but high-impact outcome.

However, even limited harassment, vessel seizures, or navigational interference would further firm up the already buoyed freight markets and introduce logistical friction and an oil supply crunch.

According to Vortexa, a more direct risk would be targeted strikes on Iranian export infrastructure, including Kharg Island or offshore loading systems, which could remove barrels from the market within days rather than weeks.

Reports earlier on Saturday indicated explosions near Kharg Island, however Lloyd’s List has been unable to independently verify the extent of damage caused.

Marine insurers meanwhile have responded swiftly with war risk notices for some policies already being cancelled. In other cases prices have dramatically risen in the wake of the strikes.

Marsh estimated near-term rate increases for Marine Hull insurance in the Middle East Gulf could range from 25% to 50%, barring any direct attack on merchant shipping, which could have major repercussions across war insurance rates.

“The primary risks centre on the Middle East Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” said Dylan Mortimer, marine hull UK war leader at Marsh said.

While insurers are expected to continue cancelling policies given the direct threat to shipping, many will renegotiate at significantly higher prices rather than denying coverage for ships sailing into the region.

While the strikes and retaliation have introduced immediate geopolitical risk into crude markets, physical supply disruption at this stage is yet to be confirmed.

When markets reopen, Brent is likely to reflect an expansion of geopolitical risk premium rather than a reaction to lost barrels, according to Claire Jungman, director of maritime risk and intelligence at Vortexa.

“We would expect volatility to increase with freight markets likely to react first and insurers reassessing risk exposure in Middle East load zones. For now, this is a pricing event rather than a fundamentals event,” said Jungman.