Iranian Insurance for the Strait of Hormuz
WANA (May 16) – As security and control of the Strait of Hormuz have become an even more strategic priority for Iran following the recent war, the Ministry of Economic Affairs and Finance is pursuing a plan to manage the waterway through an insurance-based system. According to the proposal’s architects, the model would be more compatible with international law while also generating billions of dollars in revenue for Iran.
According to a document obtained by reporters, the plan aims to establish a civilian mechanism for regulating ship traffic in the Strait of Hormuz without directly entering into disputes over transit tolls — a move that could carry significant political and legal costs internationally.
Under the proposal, Iran would provide maritime insurance services and issue certificates related to financial liability and marine insurance. This would give Tehran greater oversight of ship movements and allow it to separate and monitor the maritime routes used by different countries.
Since the beginning of the “Ramadan War,” Iranian officials have repeatedly stated that securing the Strait of Hormuz falls under the responsibility of the Islamic Republic’s armed forces. The government now appears to be seeking to transform that security role into a sustainable economic and administrative model for the post-war period.
Legal reviews conducted as part of the project suggest that directly charging ships transit fees — while potentially permissible under international law in certain circumstances — could trigger negative reactions from other countries. By contrast, offering insurance and maritime services is viewed as a lower-cost and more internationally acceptable approach.
Preliminary estimates indicate that conventional maritime services could generate around $2 billion for Iran in the best-case scenario. However, the designers of the project argue that the insurance-based model has far greater revenue potential.
According to the Economy Ministry’s proposal, the project could begin with insurance policies covering ship inspections, detentions, and confiscations. These policies would not cover damages caused by weapons strikes, thereby reducing the insurer’s risk exposure. The proposal’s authors claim this segment alone could generate more than $10 billion in revenue for the country.
The idea, however, has also faced skepticism. Mehdi Mohammadi, a trade expert at a policy think tank, argues that the global marine insurance market is highly monopolized and that Iran currently lacks a meaningful position within it. He warns that ships relying on Iranian insurance could encounter acceptance problems at some ports around the world.
On the other hand, Taha-Hossein Madani, head of a smart governance think tank, says the limitation can be bypassed. According to him, Iran could offer the proposed coverage as reinsurance in cooperation with Russian and Chinese companies, with ships purchasing it as an add-on to their primary insurance policies.
The Economy Ministry’s new proposal comes at a time when the Strait of Hormuz remains one of the world’s most vital energy chokepoints, and any change in how it is managed could carry major economic and geopolitical consequences for the region and global energy markets.
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