To understand, I read, gathered information, analyzed, and now I share what I’ve concluded.
Many believe that Iran is capable—if it chooses—of closing the Strait of Hormuz. This idea is frequently repeated in political and media analyses, as if it were purely a military matter that could be settled by a decision or direct naval action.
But the reality may be more complex—and more revealing about the nature of the modern world.
The Strait of Hormuz—one of the most critical energy arteries in the world—was not closed this time by warships, missiles, or a naval blockade. What happened was something entirely different: insurance companies stopped the movement.
Not through a direct political decision, but through a technical financial decision made by insurance and reinsurance companies that manage risk in global maritime shipping.
According to the information I gathered, around 107 large cargo ships typically pass through the Strait of Hormuz daily, carrying oil and gas that global economies depend on. These ships represent the lifelines of energy to Asia, Europe, and beyond.
But in recent days, the number dropped to around 19 ships.
A collapse in traffic of nearly 81%.
This didn’t happen because of a naval battle, but because of one decision: the withdrawal of insurance coverage.
To understand what happened, we must understand how the global shipping system works. About 90% of the world’s ships are insured through roughly a dozen maritime insurance institutions, which in turn rely on global reinsurance markets—most of which are centered in London.
When war risks rise in a region, reinsurance companies reassess the situation. If they determine that the risks have become too high, they may withdraw coverage.
And then something simple but decisive happens: without insurance, ships cannot sail.
No shipowner is willing to risk a vessel worth hundreds of millions of dollars without insurance protection.
Thus, the Strait of Hormuz was not closed by a military fleet—it was effectively shut down by calculations on a computer screen inside an insurance company.
But the more important question is not how shipping stopped, but who is actually affected.
The first to be impacted is Iran itself.
Most of Iran’s oil exports pass through the Strait of Hormuz. If shipping is disrupted, its ability to export oil drops sharply, cutting off one of its most vital sources of income—especially during times of tension and conflict.
In other words, the “oil weapon” often seen as leverage for Iran may turn into a burden on it first.
The second most exposed party is China.
China relies heavily on energy passing through this strait. Around 40% of its oil imports go through Hormuz, and about 90% of Iranian oil exports are directed to China. In addition, liquefied natural gas shipments from Qatar to China pass through the same route.
Therefore, any prolonged disruption in this vital corridor shakes one of the pillars of China’s energy security, which explains its quick calls for de-escalation.
The third affected party is the Gulf states themselves.
Saudi Arabia, the UAE, Qatar, Kuwait, and Iraq depend heavily on this maritime route to export oil and gas to the world. Around 20 million barrels of oil pass through the strait daily, and there are no real alternatives capable of handling this massive volume.
In the background of this scene, a less visible yet highly influential force emerges: the British financial system.
London has been a global hub for maritime insurance for centuries—from the famous Lloyd’s market to major reinsurance firms. This gives it indirect but powerful influence.
When insurance companies in London decide that risks are too high, global trade can freeze—without a single shot being fired.
Does anyone benefit from this situation?
In the short term, Russia may benefit. If Gulf oil exports slow down, global prices rise, making Russian oil more attractive—especially in Asia.
As for countries like India, which import around 85% of their oil needs, any disruption in the Strait of Hormuz means higher shipping costs and rising oil prices, putting pressure on inflation and the economy.
While India diversifies its sources between the Gulf, Russia, and others, prolonged instability in this vital route ultimately means everyone pays the price.
The bigger lesson is that geopolitics in today’s world is no longer driven solely by presidents, generals, or even aircraft carriers.
Often, the course of events is shaped by less visible but more powerful systems: insurance mechanisms, financial markets, and global energy networks.
Missiles may make headlines,
but risk models in insurance companies sometimes decide whether global trade moves… or stops.
It is a world no longer controlled by states alone, but also by the systems that manage risk, money, and energy.
And sometimes, a quiet financial decision in an office in London… is enough to change the movement of the world.
