1. The short answer
The war risk premium is the extra insurance cost a tanker owner pays to sail into a Joint War Committee “Listed Area” like the Strait of Hormuz, usually set as a percentage of the ship’s hull value per voyage or seven-day period, and by early September 2026 that rate stood at 3% to 10% of hull value for Hormuz transits. Underwriters do not charge a single fixed number: the rate is negotiated case by case, moves within days when the security picture changes, and adds up differently depending on the size and value of the ship.
It matters to a household in Europe or the United States because that percentage is not absorbed by the shipowner. It is added to the freight rate, and from there it moves into the price of the crude oil and refined products carried on that voyage, the same route your heating oil or diesel eventually travels.
2. Who sets it, and how it is calculated
The Joint War Committee (JWC), a body of Lloyd’s and International Underwriting Association (IUA) underwriters advised by security analysts, decides which waters count as a “Listed Area” with elevated war risk; the actual premium inside that area is then a private negotiation between individual underwriters or brokers and the shipowner, with no single published tariff (Lloyd’s Market Association; Argus Media, accessed 17 September 2026). That is why two brokers quoting the same route on the same day can report different numbers.
The Additional War Risk Premium (AWRP) is usually charged as a percentage of the ship’s Hull and Machinery (H&M) value, and it typically covers either a single voyage or a fixed seven-day period. A tanker that keeps transiting the zone, or stays inside it longer, can get back 25% to 50% of the premium as a “no-claims bonus” if nothing happens (S&P Global Commodity Insights, 30 March 2026). A separate policy, cargo war risk insurance, covers the value of the oil itself rather than the ship, and Argus Media put that at 10% to 20% of cargo value on 28 March 2026, a different base and a different number from the hull percentage above.
The Strait of Hormuz carried Listed Area status for most of 2026 at the rates shown below. The Bab el-Mandeb strait also carried it, but at a lower level, 0.5% to 0.75% of hull value through most of the year, because it is a narrower, shorter and, on the record here, less consistently attacked route (Argus Media, 28 March 2026; S&P Global, 22 July 2026).
3. How the rate moved through 2026
The table below lines up the dated readings from the record. Rates for the same period sometimes disagree because they come from different brokers quoting different ships on different days; both figures are kept rather than averaged.
| Date | Region | AWRP (% of hull value) | Source |
|---|---|---|---|
| Before 28 February 2026 | Gulf / Hormuz | 0.15% to 0.25% (Argus); 0.1% to 0.15% (S&P Global); 0.25% (Al Jazeera, citing CNBC); 0.02% to 0.05% (Euronews) | Argus Media; S&P Global, 30 Mar 2026; Al Jazeera, 3 Mar 2026; Euronews, 16 Mar 2026 |
| 1-3 March 2026 | Gulf | Jump to up to 1% within 48 hours | Al Jazeera, 3 Mar 2026, citing Marsh |
| Mid-March 2026 (peak) | Gulf | Up to 2.5% of hull value | S&P Global Commodity Insights, 30 Mar 2026 |
| 30 March 2026 | Gulf | About 1% standard, around 0.8% after no-claims bonus | S&P Global Commodity Insights, 30 Mar 2026 |
| 17-19 July 2026 | Hormuz | 3% to 10% of hull value | The National, 17 Jul 2026, citing Marcus Baker, Marsh |
| 22-23 July 2026 | Hormuz | Jump from 1%-3% to 7.5%-10% | S&P Global, 22 Jul 2026; Al Jazeera, 23 Jul 2026 |
| Early September 2026 | Hormuz | 3% to 10% of hull value, examples up to 10% | Insurance Business Magazine, reported around 9 Sep 2026 |
| Up to 3 September 2026 (cumulative) | Global | “40 to 60 times” pre-war levels at peaks | gCaptain, 3 Sep 2026, citing Lloyd’s List analyst David Osler |
These rate jumps sit next to a separate but related legal tool, force majeure, which some sellers have invoked when war risk made a contracted delivery impossible rather than merely more expensive.
4. Two disagreements worth knowing about
Sources disagree on two points that matter if you see a single number quoted as “the” war risk premium. The first is the pre-war baseline itself: Argus Media put it at 0.15% to 0.25% of hull value, S&P Global at 0.1% to 0.15%, Al Jazeera, citing CNBC, at 0.25%, and Euronews at 0.02% to 0.05%, all describing conditions before 28 February 2026. None of these figures was averaged into a single “official” pre-war rate; they are kept side by side because they come from different quoting desks.
The second disagreement is about the Hormuz peak itself. Argus Media reported on 28 March 2026 that Hormuz passage ran 5.0% to 7.5% of hull value, with peaks to 10%, illustrated by a $134 million VLCC facing a total war risk bill of roughly $65 million. S&P Global’s figure for the same broad window, published two days later on 30 March 2026, was a lower “up to 2.5%” peak in mid-March. Both figures are dated and sourced here rather than reconciled, since they may reflect different ships, brokers or exact dates within the same month.
Once a premium is set, it does not stay isolated in the shipping industry. It is added to the freight rate the shipowner charges, a mechanism our pass-through effect entry explains in general. From there it becomes one input into the diesel crack spread, the refining margin that sets the gap between crude and the diesel or heating oil price you actually pay.
5. What this means for your fuel bill
You cannot look up “the” war risk premium on any given day and convert it directly into a cent-per-litre number, because it reaches you through several layers: freight rate, refining margin and, eventually, pump or delivery price, each with its own timing. What you can do is treat a jump in Hormuz AWRP as an early warning rather than proof of anything, since the roughly $7 to $8 a barrel effect gCaptain described on 3 September 2026 was a market estimate at the height of the crisis, not a fixed add-on that applies at all times.
If you are deciding whether to lock in a heating oil or diesel price now, war risk premium news is one input among several, alongside the crude price itself and the refining margin. If insurers were to withdraw Gulf cover entirely again, as they did between 1 and 5 March 2026, expect freight and insurance costs to spike within days even before crude itself necessarily moves, since shipowners then either pay far more for replacement cover, use a state reinsurance scheme, or stop sailing the route, which is what stranded roughly 150 ships around Hormuz that week (Al Jazeera, 3 March 2026). Our buy-now-or-wait guide works through the tank-level rule for that decision. Our own fuel cost calculator lets you test what a specific crude price or premium jump would add to your own bill.
See what a higher war risk premium and crude price would add to your own fuel bill.
Run the calculator6. What the term does not mean
The war risk premium is not a single universal number, a tax, or the whole story behind a higher fuel price. There is no official published tariff: the Joint War Committee only decides which zones count as a Listed Area, not what any given ship pays inside one, so a “10%” or “40 to 60 times” headline describes one broker’s quote for one ship on one day, not every tanker crossing Hormuz that week.
It is also easy to confuse the hull percentage described on this page with cargo war risk insurance, a separate policy covering the oil itself rather than the ship, which Argus Media put at 10% to 20% of cargo value on 28 March 2026, a different base entirely. And the premium is only one channel among several by which the Gulf crisis reaches your bill: it does not include, for example, the effect of the EU’s separate price cap on Russian oil, covered in our sanctions shadow entry, or ordinary refining margin swings that have nothing to do with insurance at all.