War insurance: rerating, not retreat

Brent at 124.61 on 2026-04-10 after 62.18 on 2026-01-02 fred.stlouisfed.org is the macro expression of the story inside Gulf insurance rooms: war-risk cover did not disappear, it was rerated hard, with additional premiums reported up from 0.2 percent to 1 percent of hull value, or roughly $800,000 per VLCC voyage smallwarsjournal.com. The hit-or-miss frame is capacity versus price. Traders were set up for a withdrawal-of-cover story, but the LMA says 88% of Lloyd's marine war market participants still had appetite for hull war risks and over 90% still offered cargo cover, which is why the market has traded this as higher freight, higher inventory carry, and fatter basis risk rather than an outright freeze in flows insurancebusinessmag.com. What is priced now is clause risk: the JWC expanded Listed Areas across the Gulf, and standard war-risk policies can cancel cover within 48 hours after redesignation, so underwriters are charging for route specificity and short-notice optionality, not writing blind geopolitical betagcaptain.com warontherocks.com). If this moves from rerating to actual capacity withdrawal, the trade flips from premium inflation to physical-supply shock.