(Credit: Canva)
Shipping through the Strait of Hormuz remains severely constrained despite recent announcements of ceasefire arrangements and efforts to reopen the waterway.
According to BBC, vessels continue to avoid the strait due to ongoing security risks, uncertainty, and geopolitical tensions, even where passage is technically permitted.
Traffic levels have dropped sharply, with daily crossings falling significantly as shipping operators opt to delay or reroute journeys.
The situation is further complicated by ongoing enforcement actions in the region. The United States has intercepted an Iranian-flagged cargo vessel as part of its naval blockade, adding to an already complex and uncertain operating environment for commercial shipping.
At the same time, broader geopolitical dynamics, including military presence and competing control over navigation routes continue to create ambiguity around safe passage. This uncertainty, rather than a formal closure, is now the primary driver of disruption.
According to United Nations Conference on Trade and Development (UNCTAD), the Strait of Hormuz remains one of the world’s most critical maritime chokepoints, carrying around one quarter of global seaborne oil trade, alongside significant volumes of liquefied natural gas and fertilizers, making even partial disruption highly consequential for global trade.
What This Means for Risk Managers
According to insights from Marsh, the disruption in the Strait of Hormuz highlights a broader shift, where supply chain disruption is no longer an exception, but an increasingly persistent feature of the operating environment.
In response, organisations should focus on strengthening resilience across three key areas:
- Diversify Supply Chains and Logistics Routes
One of the most immediate responses to disruption is route and supplier diversification. As vessels reroute or avoid the Strait of Hormuz altogether, organisations must identify alternative shipping routes, suppliers, and logistics partners to reduce reliance on a single chokepoint and maintain continuity of operations.
- Strengthen Visibility and Real-Time Monitoring
In a rapidly evolving situation, timely information becomes critical, requiring risk managers to enhance visibility across their supply chains by leveraging real-time tracking and intelligence tools, maintaining close communication with logistics providers, and monitoring geopolitical developments and regulatory changes, enabling organisations to respond swiftly to disruptions, whether by rerouting shipments or adjusting delivery timelines.
- Review Insurance and Risk Transfer Strategies
The disruption has significant implications for marine insurance markets, requiring organisations to reassess their war-risk coverage and exclusions, policy limits in high-risk regions, and claims processes under conflict scenarios. As insurers adjust pricing and coverage in response to heightened geopolitical risks, risk managers must ensure their programmes remain adequate, responsive, and aligned with evolving threats.
Looking Ahead
While diplomatic efforts continue, conditions in the Strait of Hormuz remain fragile, with no clear timeline for a full recovery in shipping activity. Even if routes remain open, confidence is likely to return gradually, prolonging disruption across global trade and energy flows.
For organisations, this means ongoing uncertainty across logistics, costs, and supply chains, with such disruptions increasingly becoming part of a broader pattern shaping global trade.
In this evolving landscape, the challenge for risk managers is no longer just to respond to disruption, but to anticipate it, adapt quickly, and build resilience into the core of business operations.
