GCC OIL EMBARGO UNTIL END of CONFLICT?
https://middleeasteye.net/how-gcc-energy-embargo-could-halt-war
https://newsweek.com/force-majeure-gulf-shut-down-oil-production
What Is Force Majeure? Gulf Companies Shut Down Oil Production
by Jesus Mesa / Mar 06, 2026
“Energy companies across the Persian Gulf are invoking a little-known legal clause known as force majeure, as the escalating conflict in the region begins to disrupt one of the world’s most important energy hubs. Qatar halted production of liquefied natural gas this week after Iranian missile and drone strikes targeted Gulf energy infrastructure, raising fears that oil and gas exports across the region could soon stop. Qatari Energy Minister Saad al-Kaabi warned that if the fighting continues, producers throughout the Gulf might be forced to suspend deliveries within days. “Everybody that has not called for force majeure we expect will do so in the next few days,” al-Kaabi said in an interview with the Financial Times.
The warning comes as the widening conflict involving Iran, Israel and the United States begins to threaten energy infrastructure and shipping routes across the Gulf. The Strait of Hormuz, a narrow waterway between Iran and Oman that carries roughly one-fifth of global oil shipments, has seen tanker traffic drop sharply as the fighting intensifies. If ships cannot safely pass through the strait, producers may be unable to export their crude and liquefied natural gas, forcing companies to stop pumping once storage facilities fill. Oil prices have surged from about $70 late last week as the war has expanded.
Force majeure, a French term meaning “superior force,” is a clause included in many international commercial contracts. It allows companies to suspend contractual obligations when extraordinary events beyond their control, such as war, natural disasters or government actions, make it impossible to fulfill them. In the energy sector, declaring force majeure allows producers to halt shipments without being penalized for failing to deliver oil or gas promised under supply contracts. The potential disruption has already rattled energy markets. Analysts say oil prices could climb sharply if Gulf exports are halted for an extended period, with some forecasts suggesting crude could reach $150 a barrel if the conflict drags on.
Currently, Brent crude, the international benchmark, rose another 8.5 percent Friday to settle at $92.69 a barrel. During trading, it briefly climbed above $94, its highest level since September 2023. U.S. benchmark crude jumped 12.2 percent to $90.90 a barrel, topping $90 for the first time since the fall of 2023. Qatar’s shutdown alone is significant. The country accounts for roughly 20 percent of global liquefied natural gas supply, making it one of the most important exporters to markets in Europe and Asia. Even if the conflict ends quickly, restoring normal deliveries might take time. Energy infrastructure requires safety inspections and logistical coordination before operations can fully resume, meaning exports could remain disrupted for weeks or months.”
FORCE MAJEURE CLAUSES INVOKED
https://business-standard.com/israel-iran-conflict-force-majeure
https://www.euronews.com/business/2026/03/09/bapco-declares-force-majeure-as-iran-sets-bahrains-only-refinery-ablaze
Bapco declares force majeure as Iran sets Bahrain’s only refinery ablaze
by Una Hajdari / March 9, 2026
“Bahrain’s state energy company declared force majeure on its oil shipments on Monday after an Iranian attack set its only refinery ablaze, becoming the latest Gulf state to invoke the clause as Iran widens its campaign against regional energy infrastructure. A strike targeting Bahrain’s sprawling Al-Ma’ameer oil facility caused a fire at the complex along with material damage, the Bahrain News Agency reported, though no casualties were recorded and firefighting operations were under way. Videos widely shared on social media showed thick smoke billowing from the industrial zone housing the refinery. In its force majeure notice, Bapco Energies said its “group operations have been affected by the ongoing regional conflict in the Middle East and the recent attack on its refinery complex.”
Force majeure is a legal provision that frees parties from liability when failure to meet contractual obligations results from events beyond their control. The company said it could still meet domestic demand. The 90-year-old refinery was first reported damaged last week. Bapco had recently modernised the plant and boosted its capacity to up to up to 380,000 barrels per day, upgrading units capable of producing more jet fuel and diesel. Bahrain is not the first Gulf state to take the step. QatarEnergy made a similar declaration last Wednesday after two of its liquefied natural gas facilities were struck, forcing a production pause and sending fresh volatility through global energy markets. Qatar’s energy minister had warned that all Gulf exporters would be forced to follow suit within days. Kuwait has also declared force majeure on oil sales after cutting output at its fields and refineries.
The energy shock comes as Iran also targeted a residential area in Bahrain, wounding 32 people including children and as a separate Iranian drone attack damaged one of the kingdom’s desalination plants — the first time an Arab country had reported Iran targeting a desalination facility during the nine-day conflict, raising concern across a region that depends on such plants for its water supply. Bahrain is an archipelago of 33 natural islands spanning approximately 760 square kilometres, roughly the size of Greater London, with a population of about 1.6 million, making it the third-smallest nation in Asia. It is one of the most densely populated countries on earth, and one of the Gulf’s smallest but most strategically significant oil producers.”
WAR RISK CARGO INSURANCE
https://marinepublic.com/shipping-in-war-zones-war-risk-insurance
https://reuters.com/maritime-insurance-premiums-surge-iran-conflict
Maritime insurance premiums surge as Iran conflict widens
by Noor Zainab Hussain and Manya Saini / March 6, 2026
“As the conflict in the Gulf widens, maritime insurance premiums for war coverage are surging — in some cases by more than 1000% — dramatically driving up the cost of moving energy through a critical maritime corridor. The conflagration sparked by Saturday’s Israeli-U.S. air strikes against Tehran has paralyzed traffic through the Strait of Hormuz, a major shipping chokepoint. Iran on Monday said it would fire on any ship trying to pass, and at least nine vessels have suffered damage in the area since the conflict began. War risk insurance allows ship owners to claim against any damage to their vessel or the cargo resulting from conflict or terrorism. Policies are typically annual, although some cover one-off voyages through risky waters, including war zones.
The spike in premiums underscores how the war is raising costs for ship owners, traders and energy companies moving cargo through the Strait, adding to fears the conflict — which shows no signs of abating — could stoke inflation if it goes on, said analysts. “The hull war market has reacted more immediately,” due to the risk of large, concentrated losses if multiple vessels are hit in the same area, said Stephen Rudman, head of marine, Asia, at global insurance broker Aon, adding that if the situation escalates materially, further rate correction is likely. “Additional premiums for vessels transiting high-risk waters are rising sharply and may continue to fluctuate in the short term,” he said. Cargo war risk premium rates are also increasing, with quotes being reviewed on a voyage-by-voyage basis, particularly for energy and bulk commodity trades, he said.
Analysts at Jefferies estimated on Thursday that potential industry losses from at least seven vessels reported damaged, at the time its note was published on March 5, could reach up to $1.75 billion. With most tankers valued between $200 million and $300 million, the new insurance rate of 3% would imply a hull war risk premium of about $7.5 million, up from around 0.25%, or $625,000, before the conflict began, the brokerage added. Angus Blayney, marine divisional director at Gallagher, a major insurance broker, told Reuters that rates have increased and are changing daily depending on vessel type and individual circumstances, but he did not provide specific figures. He added that cover remains available. Dylan Mortimer, marine hull UK war leader at insurance broker Marsh, estimated that ratings are roughly trending between 1% and 1.5% of vessel value, with a slight variation both upwards and downwards depending on specific risk factors. “Rate spectrum is wide and varied depending on many factors, including whether vessel is east of or west of the Hormuz chokepoint,” Mortimer said.
More than 20 million barrels of crude, condensate and fuels passed through the Strait daily last year on average, data from analytics firm Vortexa showed. About a fifth of the total oil the world consumes passes through the Strait. “There remain approximately 1,000 vessels, about half of which are oil and gas tankers, with an aggregate hull value exceeding $25 billion in the Persian/Arabian Gulf and surrounding waters,” Lloyd’s Market Association’s CEO Sheila Cameron said in a statement. Cameron added that the vast majority of these vessels were insured in the London market and insurance “currently remains in place”. At least 200 ships remained at anchor in open waters off the coast of major Gulf producers, Reuters reported on Wednesday. Morningstar DBRS wrote in a note earlier this month that reinsurers may respond by raising the loss level at which their liability kicks in, or reducing capacity, “leaving primary underwriters retaining more risk and potentially pressure solvency levels. Supply chains will be stressed as goods are rerouted via the Cape of Good Hope or overland routes, increasing transit times and costs,” it added.
The Trump administration is exploring ways to bring down oil prices by getting shipping routes moving again. On Tuesday, President Donald Trump said the U.S. Navy could begin escorting oil tankers through the Strait of Hormuz and added he had ordered the U.S. International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf. U.S. officials also met with Marsh to discuss the matter, the company said on Wednesday. A Lloyd’s spokesperson also said the company was engaging with the Development Finance Corporation and relevant stakeholders to find solutions. But analysts said it remains unclear how the administration intends to intervene and whether any scheme would apply to ships and cargo of all nationalities. In the absence of an alternative, they expect many ship owners to reinstate their previous cover at a higher rate and absorb the costs. “It’s like insuring a burning building,” Dr Michel Léonard, chief economist and data scientist at Insurance Information Institute, said.”
MARINE INSURERS CANCEL WAR RISK COVERAGE
https://aljazeera.com/maritime-insurers-cancel-war-risk-coverage-in-gulf
https://gcaptain.com/marine-insurers-cancel-war-risk-iran-hormuz/
Marine Insurers Cancel War Risk Cover as Iran Conflict Escalates
by Emily Chow and Jeslyn Lerh / March 2, 2026
“Marine insurers are canceling war risk coverage for vessels and oil shipping rates are set to surge further after the widening Iran conflict left at least three tankers damaged, a seafarer killed and 150 ships stranded around the Strait of Hormuz. Iran has responded to U.S. and Israeli strikes that began on Saturday with retaliatory attacks that have sharply increased risks to commercial shipping in the past 24 hours. In the Strait of Hormuz and surrounding waters, at least 150 vessels including oil and liquefied natural gas tankers had dropped anchor, shipping data showed on Sunday. Typically, ships carrying oil equal to about one-fifth of global demand from Saudi Arabia, the United Arab Emirates, Iraq, Iran, and Kuwait sail through the Strait along with tankers hauling diesel, jet fuel, gasoline and other products. The disruption sparked a 9% jump in global oil prices on Monday.
Companies including Gard, Skuld, NorthStandard, the London P&I Club and the American Club said their cancellations would take effect from March 5, according to notices dated March 1 on their websites. War risk cover will be excluded in Iranian waters, as well as the Gulf and adjacent waters, according to the notices. Skuld added in its notice that it was working on a buy-back option to reinstate cover. Japan’s MS&AD Insurance Group told Reuters it had suspended underwriting of a range of insurance policies covering war risks in the waters around Iran, Israel and neighboring countries. Meanwhile, costs of shipping oil from the Middle East to Asia – already at six-year highs – are set to rise further as the widening Iran conflict is deterring shipowners from sending vessels to the region, market sources and analysts said on Monday.
Spot shipping rates from the Middle East to Asia, more commonly known as TD3C DFRT-ME-CN, are expected to extend gains, shipbrokers said. The benchmark has nearly tripled since the start of 2026. Brokers pegged the spot rate for hiring a very large crude carrier on the key Middle East to China route early in Asia on Monday about 4% higher than on Friday, near W225 on the Worldscale industry measure or equivalent to at least $12 million. “TD3C rates were rising exponentially before the attacks and will continue to remain elevated as countries scramble to meet their energy needs,” said Emril Jamil, a senior LSEG analyst. There is still a lot of uncertainty on where the final rate would be on Monday but all Middle East loading routes are expected to hold firm, a shipbroker said. They declined to be named as they were not authorized to speak to the media. Meanwhile, the market will need more ships to load crude from the U.S. and West Africa on longer voyages which could support freight on those routes, a source from a shipping company said.”
PREVIOUSLY
CATASTROPHE BONDS
https://spectrevision.net/2024/08/16/catastrophe-bonds/
SUPERTANKER FUTURES
https://spectrevision.net/2020/04/07/supertanker-futures/
FORCE MAJEURE
https://spectrevision.net/2017/02/17/force-majeure/
LEGENDS of the OSS : the INSURANCE INTELLIGENCE UNIT
https://spectrevision.net/2016/02/28/insurance-intelligence-unit/
WEATHER DERIVATIVES
https://spectrevision.net/2012/04/27/weather-derivatives/
NOTHING but PETRODOLLARS
https://spectrevision.net/2010/10/06/nothing-but-petrodollars/
