Hull mines in Hormuz add a new line to the war-risk sum

Attackers in a small boat came alongside a tanker on the night of 29 October and fixed two explosive charges to its hull, UK Maritime Trade Operations said. The ship was about 25 nautical miles (46 km) north-east of Khasab, Oman, and was transiting outbound^2, 1.

The devices detonated above the waterline on the port side, started a fire in the engine room and briefly disabled the tanker. The crew put the fire out, there was no environmental impact, and the ship continued to its next port of call².

UKMTO did not name the vessel in its warning, numbered 187-26. Maritime security sources identified it as the Panama-flagged Louise 1, a 159,092 dwt tanker built in 2004 and now under Indian management^1, 6, 7. Three maritime security sources told Reuters the weapons were limpet mines, the first successful use of the method in the strait since the war began in February¹. Reuters reported it was not immediately clear who was behind the attack¹. Martin Kelly, cited by The Maritime Executive as founder of Orbital Risk Intelligence, called it "the latest step in a deliberate evolution of Iran's campaign at sea"⁷.

Iran's IRGC Navy claimed on 30 October that three tankers had caught fire and exploded, which US Central Command disputed^2, 7. One commentator, Babak Taghvaee, said IRGC Navy special forces used a Maham 7, a 220-kilo bottom mine. That detail is not corroborated, and UKMTO's advisory describes two explosive devices without naming the type^8, 2.

A method insurers price differently

Marisks, a Greece-based risk firm, said limpet mines were first used in the region in 2017 and used against tankers in the strait in the years that followed. It called the method "cheap, low tech and very efficient"¹.

What changed is where the charge can go. Kelly said a mine placed while a ship is at anchor can sit below the waterline. There it causes significant damage and flooding. Mines attached to a ship under way can only go above it².

War-risk hull cover follows that logic. It is calculated on the value of the ship and varies with the expected stability of the places the vessel sails to³. Underwriting therefore leans on where a ship waits, not only where it transits.

The International Union of Marine Insurance said additional war premiums helped lift ocean hull premiums 9.4% to $10.5 billion in 2025⁹. It said war cover became increasingly prominent as the Middle East conflict intensified⁹. Analysts and refiners told BusinessLine that record freight rates and high marine insurance premiums are adding to the volatility of already high crude prices¹⁰.

Public commentary gives direction rather than a per-transit quote. Sparta's Aaron Kildow said much of the geopolitical risk is now reflected in freight rather than in crude prices¹¹.

What India pays now

Shipping crude from the Middle East Gulf to Asia cost more than $37 a barrel by mid-October, over five times pre-war levels, according to the International Energy Agency. For a 2 million barrel VLCC, that is more than $74 million a cargo, against less than $15 million before the conflict⁴.

Sparta put the gap between loading prices inside the strait and at the lightering zone south of Fujairah at $20 to $30 a barrel¹¹. Seafarers are being offered hazard bonuses to make the crossings⁴.

Indian exposure is a volume story. Middle East crude was about 54% of India's oil imports in September, at around 2.8 million barrels a day, up from 32% in August⁵. Total imports were about 5.33 million barrels a day⁵. The Indian basket averaged $120.46 a barrel in October so far, to 26 October¹⁰.

Most of that risk now arrives inside a delivered price. Equirus, commenting on HPCL's September quarter results, said almost all cargoes are bought on a delivered basis, against about half earlier¹⁰. On delivered terms a refiner sees no separate war-risk line, only a higher number set by a seller who chooses the route.

India imported 1.40 million tonnes of LPG in September, up from 1.30 million tonnes in August¹². The US share of India's LPG imports rose to 67% from under 10% over the past year, according to US Ambassador Sergio Gor¹³. That pulls part of the trade away from Hormuz.

Container and breakbulk trades are repricing differently. Xeneta data cited by Bloomberg show China to Gulf spot rates as of 23 October up 214% to Jeddah and 442% to Khor Fakkan from before the war¹⁴. About 100 container services transited or operated inside the Gulf before February. Few remain, and they are almost all Iran to China trade, Xeneta's Peter Sand said¹⁴. Jebel Ali terminals now move about 3,000 containers a day through new truck networks, against a normal 40,000, DP World's Yuvraj Narayan said, and road alternatives cost four or five times more¹⁴. Berthing delays at Fujairah and Khor Fakkan are straining feeder capacity on the India to Middle East trade¹⁵.

Owners vote by staying away

Windward reported Gulf national oil companies assembling a fleet of nearly 230 tankers, about 80% of them VLCCs, to keep exports moving because few independent owners will load in the region. That build-out ties up an estimated 15% to 20% of the global VLCC fleet¹⁶.

UKMTO's weekly figures show what is left. In its latest reporting week it logged 122 outbound and 155 inbound transits, up from 114 and 127, but still about 70% below pre-conflict levels. About 80% of transits reported through the US Naval Cooperation and Guidance for Shipping involve energy carriers².

Official counts also understate the risk. Kelly said companies are not reporting attacks to UKMTO or NCAGS as often as before, so attack volumes are not accurate⁸. UKMTO said it reports only incidents verified through primary sources². The loss record underwriters price from is therefore thinner than the real one^2, 8.

What to watch

Kelly said attacks in the strait had fallen over the past 24 to 48 hours⁸. He said Iran may be preparing for renewed conflict with the US before or after the midterms on 3 November⁸. President Donald Trump said the US would not act before the midterms⁷. UKMTO has recorded 88 incidents involving vessels in the strait through 28 October².

Three things will settle the insurance question. First, whether a charge is placed on a ship at anchor, which would confirm the below-waterline scenario Kelly described². Second, whether reported transits keep recovering from 122 and 155². Third, whether the Gulf producers' 230-ship fleet keeps growing, a sign that independent owners still refuse the run¹⁶. Brent touched $118 on 30 October and ended the day at $117.70, so the market is not pricing an early all-clear⁷.