Iran Proposes Insurance-Based Framework to Formalise Control Over Strait of Hormuz

## Iran Moves to Assert Formal Authority Over Strait of Hormuz Iran has proposed a sweeping new governance framework for the Strait of Hormuz, one of the world's most strategically vital oil shipping chokepoints, according to reporting by Splash247 as part of its weekly news wrap. Under the proposal, Iran would formalise its control over the strait through an insurance-based mechanism, effectively requiring vessels to engage with Iranian-administered processes as a condition of safe transit. Simultaneously, Tehran is demanding that all vessels file mandatory cargo declarations with a newly created Iranian maritime authority prior to passage. The Strait of Hormuz is the single most important maritime chokepoint for global oil flows, with an estimated 20–21 million barrels of crude oil and petroleum products passing through it daily — roughly 20% of the world's total oil consumption. Any formalised Iranian oversight regime would have profound implications for global energy markets, shipping insurers, tanker operators, and the flag states of vessels transiting the waterway. The proposal represents a significant escalation in Iran's long-standing efforts to leverage its geographic position along the strait's northern shore. If implemented, the mandatory cargo declaration requirement would give Tehran unprecedented visibility into the commercial activities of vessels operated by nations that do not recognise Iranian jurisdiction over the waterway — including the United States, European Union member states, and Gulf Cooperation Council countries. The insurance framework element is particularly notable given the central role that Protection & Indemnity (P&I) clubs and war risk underwriters play in enabling tanker operations in the region. By tying transit conditions to insurance compliance, Iran could potentially create a mechanism that indirectly compels foreign shipowners and operators to engage with its authority structures. Splash247 described the period surrounding this development as 'shipping's most frantic news cycle of the year,' suggesting the Hormuz proposal emerged alongside a cluster of other significant industry developments. The international shipping community, flag states, and maritime insurers are expected to respond cautiously to the proposal. The International Maritime Organization (IMO) has historically maintained that straits used for international navigation are subject to the right of transit passage under the United Nations Convention on the Law of the Sea (UNCLOS), a position that would be in direct tension with Iran's proposed unilateral framework. Shipowners and operators with vessels trading in the Persian Gulf region are advised to monitor developments closely and consult with their P&I clubs and legal advisors regarding potential compliance implications.