For nearly a year, shipowners passing through the Strait of Hormuz followed a simple guideline: stay clear of the Iranian side and keep close to the Omani coast to reduce risks. However, this guideline changed early Tuesday morning.
According to Paul Morgan (gCaptain), two crude carriers flagged in the UAE, Al Bahiyah and Mombasa, operated by ADNOC Logistics and Services, were hit by Iranian cruise missiles while navigating the southern traffic lane within Omani territorial waters. This lane had become the preferred route for many in the industry.
One Indian crew member was killed and eight others were injured, four of them seriously, before the fires on both ships were extinguished. The Iranian Revolutionary Guard Corps claimed responsibility for the attack, alleging that the vessels disregarded warnings and entered a prohibited area, while accusing the United States of directing traffic into that lane on purpose.
In a post on Truth Social, Trump stated that the Strait of Hormuz “is OPEN, and will remain OPEN, with or without Iran,” following several days of increased U.S. strikes on Iranian targets, and encouraged commercial shipping to use the southern lane along the Omani coast. While the strait may still be technically open, the route is no longer considered safe.
Many in the industry recognize that incidents like this are more than just numbers; they mark a significant event. The southern lane had not been officially deemed safe; however, it had become the assumed safest option for vessels, supported by months of relatively trouble-free crossings while the northern lane, near the Iranian coast, faced most of the risk.
This assumption has now been challenged. If Iranian forces can accurately strike two large tankers within Omani waters, then geographical factors no longer provide meaningful protection for ship owners and operators. The Strait of Hormuz has effectively become a contested area from one shore to the other.
It's important to understand why this attack matters more than earlier incidents this year, including attacks on the Qatari LNG carrier Al Rekayyat and a Saudi tanker off Oman. While those events were concerning, they suggested that the southern route still had some safety margin. This recent attack eliminates that notion.
Two large, easily identifiable tankers were attacked and disabled while operating in what was thought to be a safe part of the strait. There’s no further south to move, and any operator still claiming that the southern lane carries a significantly lower risk is now working under an outdated assumption.
The decision to specifically target UAE vessels is worth noting. The UAE is in a complicated position in this conflict, being closely linked to Western security while maintaining ties with Tehran that other Gulf countries lack. Attacking UAE shipping allows Iran to express its discontent and demonstrate its reach without directly engaging U.S. Navy forces. This also serves to show that Iran can threaten shipping throughout the strait, not just in waters near its coastline, which is significant considering the military challenges it has faced.
The commercial impact of this incident is already being felt and is likely to grow throughout the week. War risk premiums for transits through Hormuz, which had decreased during calmer periods earlier this year, will likely be reassessed upwards. I expect markets in London and Oslo will react quickly, given the circumstances of this attack. More importantly, the geographical boundaries that underwriters use to define risk zones may also need to change. Insurers have typically set higher premiums for routes closer to the Iranian coast, but if this distinction fades, it could mean the entire strait becomes a high-risk area, leading to higher premiums and more complex insurance considerations.
Shipowners will also need to closely review their charterparty war risk clauses this week, and crews may exercise their right to refuse voyages they deem unsafe. This isn't just a theoretical right; it has been upheld in previous Gulf crises, and there's likely to be an increase in refusals, especially among crews familiar with the risks after having crossed the strait before.
Crew members' well-being is often overlooked in discussions focused on geopolitics and freight rates. The seafarers making these crossings are civilians, not soldiers. They are now working within missile and drone range to transport goods that many people take for granted. Those of us who have been through high-risk waters know that the psychological strain from repeated dangerous transits accumulates and can go unnoticed in casualty reports. Operators who treat this purely as a logistical issue may neglect their duty of care to their crews.