MUSCAT: A number of leading international P&I (Protection and Indemnity) Clubs have announced that war-risk cover will be rolled back effective midnight, Thursday, March 5, 2026, across the Arabian Gulf, Strait of Hormuz, Sea of Oman and parts of the Arabian Sea in light of heightened risks to vessels operating in these waters amidst the ongoing conflict involving Iran.
The measure applies to vessels traversing the following designated risk zone: all Iranian waters — including a 12-nautical-mile belt extending from Iran’s coastline — as well as the entire Arabian Gulf, the Strait of Hormuz and the Sea of Oman. It also covers all waters west of an imaginary line drawn from Oman’s territorial limit off Ras Al Hadd northeast to the Iran–Pakistan maritime border. In practical terms, this encompasses the full Hormuz gateway and surrounding approaches, but excludes the wider Arabian Sea and Indian Ocean beyond Oman’s easternmost tip.
Cancelling or suspending war-risk coverage are Gard AS, Skuld, North Standard, London P&I Club, American Club, The Swedish Club and Steamship Mutual Underwriting Association, among others. Driving the action, however, are reinsurers that have begun tightening or withdrawing backing for Gulf-related exposure.
Consequently, war-risk cover is being cancelled across a broad range of marine and related liability policies. These include P&I and liability covers for charterers and traders, comprehensive general liability policies for ships and mobile offshore units (MOUs), crew and passenger liability, carriers’ liability, bunkers cover, as well as ancillary protections such as loss of use, loss of freight, extra costs, deviation liability, divers’ cover and interest insurance for charterers and purchasers.
In essence, the cancellation applies not only to standard vessel P&I war extensions but also to a wide spectrum of associated maritime, offshore, cargo, crew and commercial liability protections that rely on war-risk backing.
According to market experts, the impact on vessel movements and cargo flows to and from Omani ports is likely to be less severe than for GCC ports located within the Arabian Gulf. Of Oman’s three main commercial gateways, SOHAR Port and Freezone technically falls within the war-risk area designated by many P&I Clubs. In practice, vessels calling at Sohar may require additional premiums, voyage-by-voyage approval and special underwriting clearance; war-risk cover is not necessarily denied, but it is no longer automatic under standard terms. By contrast, Port of Duqm lies south-east of Ras Al Hadd and is generally outside the defined risk zone, while Port of Salalah, on the Arabian Sea, is clearly outside it.
Nevertheless, ships calling at Sohar, Duqm or Salalah may face higher insurance premiums if their voyage routes pass near designated risk zones. Even though these ports lie outside the Arabian Gulf, carriers may factor increased insurance costs into rates for vessels bound for or departing Oman. Consequently, freight rates for Oman-linked cargo — particularly bulk, container and energy shipments — could rise.
Furthermore, with many carriers avoiding the Strait of Hormuz and parts of the northern Arabian Sea to limit war-risk exposure, shipping routes between Asia, Africa, Europe and the Gulf are being reshaped. For Oman’s ports, this may mean longer voyage times due to southern rerouting and altered traffic patterns as some carriers bypass the Gulf entirely in favour of alternative hubs. The result could be a shift in trade flows, potentially boosting Oman’s role as a trans-shipment hub — or, conversely, reducing calls if Gulf-focused services are scaled back.
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