Iran War Monthly Report: Daily traffic in the Strait of Hormuz plunges by 95%, oil prices soar by 60%, and ship insurance premiums skyrocket.

As of now, March is the first full month after the outbreak of the Iran war, with less than 6 ships passing through the Strait of Hormuz connecting the Persian Gulf to the world every day on average. Ship tracking data shows that under normal circumstances, about 135 ships would pass through this waterway each day. Data shows that during this period, 80% of the few oil tankers leaving the strait were Iranian or belonged to countries friendly with Iran. Electronic interference in the Strait of Hormuz area disrupts ship tracking systems, with some vessels even shutting off their transponders, affecting the timeliness and accuracy of tracking data. Despite this, various signs indicate that Tehran's control over the strait is strengthening. Nowadays, almost all ships crossing the strait sail along routes approved by Irancloser to the Iranian coast rather than the Omani side of the straitand usually negotiate for safe passage. Over the past few days, Malaysia and Thailand announced bilateral agreements to rescue oil tankers stranded in the Gulf. "The Strait of Hormuz is still a tightly closed gate for oil tankers," said Anoop Singh, head of global shipping research at oil brokerage Oil Brokerage Ltd, adding that without a ceasefire, this issue is unlikely to be resolved quickly. "Even with a ceasefire, it does not mean that oil transportation through the Strait of Hormuz will quickly resume. Oil traders, refiners, and supply chain participants are being forced to make adjustments." Iran is preparing to introduce a toll system through legislation, requiring all ships wishing to pass through the area to provide detailed information and pay a fee. This formalizes the situation previously reflected by many ship owners: oil tankers are often asked by intermediaries to provide cargo and crew lists, and in some cases, to pay fees. Perhaps as part of regulatory measures, some cases of interfering signals have begun to decrease, which will help facilitate navigation in the area. The United Nations Convention on the Law of the Sea stipulates that transit ships should be allowed to pass through important waterways, including this passage composed of overlapping territorial waters of Iran and Oman. However, both Iran and the United States have not formally ratified the UN Convention on the Law of the Sea. The sovereignty over this waterway is one of the five conditions Tehran has proposed to Washington for peace. After the U.S. and Israel began airstrikes on the Persian Gulf at the end of February, Iran immediately declared control of this vital chokepoint, warning that no U.S. ships should enter the Persian Gulf. In early March, four ships with no clear connection to the U.S. were shelled, resulting in at least three deaths, causing panic among the crew, shipowners, and insurance companies. Subsequently, Iran has almost completely blocked the Strait of Hormuz through threats and attacks, which has become an extremely effective asymmetric weapon for Iran against the two world's strongest military powers. This has enabled Tehran to directly influence the global energy market and cause significant economic lossesdespite a range of measures proposed by Washington from insurance support to naval escort, it has been difficult to cope with. Data shows that of the 110 ships leaving the Persian Gulf this month, more than 36% are Iranian ships subject to sanctions or belong to the so-called "dark fleet" serving Tehran. As for oil tankers, of the 35 oil tankers leaving the Persian Gulf, 21 of them have direct links to Iran, but most others are heading to countries friendly with Tehran. Before this war, it was widely believed that Iran would never attempt to block the Strait of Hormuz, fearing it would jeopardize its own exportsthis vital economic lifeline. However, ship tracking data shows that even as other ships are held up, oil producers in the area have had to seek alternative solutions or shut down production due to saturation of oil storage facilities, while Tehran's oil continues to be transported. According to data from the intelligence company Kpler as of March 26th, Iran's daily oil export volume this month was about 1.8 million barrels, an increase of nearly 8% from the average level in 2025. Analysis shows that this could bring in hundreds of millions of dollars in oil revenue for Tehran. In contrast, Iraq's export volume from the depths of the Gulf has decreased by over 80% this month compared to 2025, while Saudi Arabia's export volume is more than a quarter lower than last year's averageeven though a pipeline transports its oil to the Red Sea. Iran's control over the oil market is evident in the oil market, with Brent crude oil rising by nearly 60% this month. This control also translates into diplomatic influence, especially among large oil-importing countries. Countries like India, Turkey, Pakistan, and Thailand have sought permission from Tehran to allow ships to pass through Iran, easing their energy shortages. Even Washington has been forced to make concessions to suppress oil prices, exempting some Iranian maritime oil from sanctions. Due to concerns about being caught off guard if sanctions were reinstated, buyers have been hesitantbut India imported Iranian liquefied petroleum gas for the first time in nearly eight years. Meanwhile, other Gulf oil-producing countries are rushing to redirect oil shipping routes elsewhere. Oil traders, shipping companies, and all market participants reliant on long-established norms are working to adapt. Overnight, benchmark freight rates from the Middle East to China collapsed, prompting the Baltic Exchange to try using a new benchmark derived from Oman as ships redirected to the Arabian Sea and Red Sea to handle redistributed cargo flows. Traders and officials say local oil benchmarks have become extremely unstable and unreliable, no longer truly serving the purpose of price discovery. The head of the International Energy Agency urges European countries to consider decoupling natural gas and electricity prices to limit the impact of the Iran war. Insurance companies are facing unprecedented challenges as well. The London-based insurance company alliance, the Joint War Committee, has designated almost the entire Middle East region as a war zone. As a result, war risk insurance rates for ships in the Persian Gulf and the Strait of Hormuz have soared, with premiums in the Persian Gulf region being about 1.5% of the ship's value, and sometimes reaching as high as 10% in the Strait of Hormuz region. In theory, Tehran's fines provide a framework for the resumption of shipping. However, it underscores a reality: even if the war ends, it will not be possible to return to pre-war status. Many large ship owners and insurance companies say that even if they wanted to, it would be difficult to do so, as they fear violating U.S. sanctions. "If countries decide not to respect laws that have been in place for many years, that would set a dangerous precedent," said Amanda Bjorn, claims manager at maritime insurance brokerage Cambiaso Risso Asia.