LONDON

Marine insurers are canceling war risk coverage for vessels traversing the region in response to joint US and Israeli attacks on Iran.

Risks in the Strait of Hormuz have surged since the attacks began over the weekend.

Marine insurers NorthStandard, the London P&I Club, Gard, Skuld, and American Club issued cancellation notices due to heightened war risks in Iran and the Persian Gulf.

Iran has not yet officially commented on the closure of the Strait of Hormuz, but the cancellation of war risk policies and security concerns have brought traffic in the strait to a standstill.

The Strait of Hormuz is a narrow waterway connecting Middle Eastern oil and liquefied natural gas (LNG) production to world markets via the Arabian Sea and the Indian Ocean.

Oil and petroleum products from Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, and Iran are transported through this passage.

The strait accounts for roughly 20% of the world’s daily oil consumption, or about 20 million barrels per day.

Asian countries such as China, India, Japan, and South Korea receive a significant portion of their oil shipments via the Strait of Hormuz.

Around 20% of global LNG exports pass through the strait, and almost all of Qatar’s LNG exports, one of the world’s largest, reach customers via this route.

Large quantities of fertilizers, methanol, petroleum coke, and grain also pass through the strait.

*Writing by Emir Yildirim in Istanbul