The neutral ship is a historical artefact. It no longer exists in the Strait of Hormuz.
The neutral ship is a historical artefact. It no longer exists in the Strait of Hormuz.
The US Navy imposed a full naval blockade of Iranian ports on April 13, targeting all ships seeking to reach Iranian ports. On April 22, Iran responded by firing on three ships and seizing two of them in the Strait. The following day, Trump ordered the US Navy to destroy any Iranian boats laying mines. The ceasefire is functionally over. We now have a dual blockade — the US blockading Iran, Iran blockading the Gulf — with commercial shipping caught between two armed forces that are each claiming authority over the same waterway.
The insurance implications are direct. War risk premiums that had eased slightly during the ceasefire have surged again on the back of the blockade declaration. Oil jumped 7% immediately on the announcement. ICIS called April a record-breaking month for European polyethylene prices — European ethylene contracts for April settled at €1,595 per tonne, a record €450 increase over March, nearly double the previous record set after Russia invaded Ukraine.
The operating context
The cascading failures have now moved beyond oil and plastic. PCB prices jumped 40% in a single month as electronics factories ran out of raw materials. Goldman Sachs called it a structural shortage that cloud service providers are being forced to absorb. Fertilizer supply chains are disrupted — urea, the nitrogen fertilizer that grows a significant portion of the world's food, passes through the Strait. Chip production in Taiwan and South Korea is being squeezed by feedstock constraints.
What I am watching is a system that is failing in sequence. Not catastrophically, not all at once — but in the slow, grinding way that actual systemic crises work. Energy first, then plastics, then fertilizers, then electronics. Each sector absorbs the shock until it can't, and then passes it on.
I've seen this pattern in aviation networks. When a hub closes, you don't lose one route. You lose the load factor across every route that connected through it. The Strait is a hub. And the hub is closed.
What changes the decision
Reroute now. Every week you wait is a week of options you no longer have.
Predictive Intelligence. Human Insight. — Lars P.S. Saudi Arabia's East-West pipeline — the main bypass for Gulf oil — has a capacity of 5 million barrels per day. The Strait normally moves 20 million. The bypass covers 25% of the problem at best. The other 75% is still sitting in the Gulf.