Strait of Hormuz Disruption: Managing Force Majeure and Supply Chain Risks

Disruptions affecting the Strait of Hormuz are increasing pressure on global shipping routes, raising force majeure concerns and creating new challenges for energy and logistics supply chains. Businesses involved in Gulf trade should reassess contracts, insurance coverage, and contingency planning to manage force majeure risks and supply chain disruption.

Recent security incidents and navigation interference in the Strait of Hormuz have significantly disrupted commercial shipping activity, raising concerns for global energy supply chains and maritime logistics networks. The situation is prompting rapid reassessment of contractual obligations, insurance coverage, and operational risk management among shipping companies, energy producers, and commodity traders.

Although international maritime law continues to guarantee transit rights through the strait, the practical operating environment has become increasingly complex. Shipowners, charterers, insurers, and cargo interests must now evaluate whether voyages remain commercially and operationally viable under evolving risk conditions.

For businesses relying on Gulf energy exports or regional maritime routes, the disruption is triggering renewed attention to force majeure clauses, charterparty risk allocation, and insurance exposure.

Strait of Hormuz: A critical global energy transit route

The Strait of Hormuz remains one of the world’s most important maritime chokepoints. According to the US Energy Information Administration, approximately 20 million barrels of oil per day passed through the strait in 2024—representing roughly 20 percent of global petroleum liquids consumption. The corridor also carries close to one-fifth of global liquefied natural gas (LNG) trade, primarily from QatarEnergy.

Alternative export routes exist but remain limited. Pipelines such as the East–West Pipeline operated by Saudi Aramco and the Abu Dhabi Crude Oil Pipeline provide partial bypass capacity, but analysts estimate that these routes can substitute for only a small share of the volumes normally shipped through Hormuz.

As a result, any disruption affecting the strait has immediate implications for global energy markets and maritime logistics.

Maritime security developments affecting shipping activity

Shipping risk levels in the Gulf have increased in recent weeks following reported attacks on commercial vessels and ongoing electronic interference affecting navigation systems.

Updates issued by the Joint Maritime Information Centre indicate that maritime risk in the region has reached a critical level, with confirmed incidents involving commercial vessels and continued reports of GPS and AIS signal interference.

These conditions have led many operators to delay or reassess voyages through the strait, resulting in a sharp reduction in observable vessel traffic during parts of March.

The issue has also reached international regulatory forums. On March 19, 2026, the International Maritime Organization convened an extraordinary council session in London to address maritime safety concerns and explore mechanisms to support secure passage for commercial shipping.

Industry bodies such as the International Chamber of Shipping have backed the initiative and called for measures to ensure the safety of seafarers and the continuity of global trade routes.

Contractual implications: Force majeure and performance risk

The current situation is also testing the resilience of commercial contracts across the energy and shipping sectors.

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Force majeure clauses—commonly included in commodity sale agreements and long-term LNG supply contracts—allow parties to suspend contractual obligations when extraordinary events prevent performance. However, the applicability of these provisions depends on the precise wording of the contract and the ability of the affected party to demonstrate that the event genuinely prevents delivery rather than simply increasing costs.

In the energy sector, QatarEnergy has reportedly declared force majeure on certain LNG contracts following damage affecting export capacity and operational disruptions.

Such declarations can have cascading effects across supply chains. When a seller invokes force majeure under a supply agreement, related shipping arrangements (such as charterparty contracts) may be suspended or cancelled.

Charterparty contracts and navigation risk

In shipping contracts, risk allocation is often governed not by force majeure provisions but by war-risk and safe-port clauses contained in charterparty agreements.

These clauses, widely standardized through contractual frameworks developed by the BIMCO, allow shipowners to refuse orders that would expose a vessel, crew, or cargo to elevated security risks.

Where such clauses apply, charterers may be required to nominate alternative routes or ports, or negotiate adjustments to freight rates and insurance premiums.

In practice, disputes often arise over whether the shipowner’s decision to avoid a particular route was reasonable under the terms of the contract.

Insurance implications and rising premiums

Insurance markets are also responding quickly to developments in the Gulf.

The London insurance market’s Joint War Committee recently revised its list of high-risk maritime areas, expanding designated zones in the region. This classification typically triggers additional insurance premiums for vessels entering the affected waters.

At the same time, insurers emphasize that standard Protection and Indemnity coverage does not include war-risk liabilities. Organizations such as Britannia P&I note that separate war-risk insurance policies are required to cover incidents arising from security-related maritime events.

To support continued shipping activity, insurers are exploring new coverage arrangements. For example, Chubb recently announced a maritime insurance facility designed to support vessels transiting the Gulf under elevated risk conditions.

However, the availability of coverage does not necessarily guarantee affordability, as premiums can increase significantly during periods of heightened risk.

Supply chain and logistics implications

While energy shipments remain the most directly affected sector, broader logistics networks are also experiencing knock-on effects.

Container shipping operators are reporting disruptions in depot operations, container repositioning, and inland logistics across Gulf ports. Companies such as Maersk have issued advisories highlighting operational adjustments and additional surcharges linked to the situation.

Global logistics markets are also adapting. Analysts note that disruptions affecting Gulf maritime routes can indirectly tighten air freight capacity and raise transportation costs across alternative supply corridors.

What businesses should monitor

Companies with exposure to Gulf trade routes or regional energy supply chains may wish to review several key areas:

• Contractual provisions: Examine force majeure clauses, safe-port obligations, and war-risk provisions in supply agreements and charterparty contracts;
• Insurance coverage: Confirm whether existing policies adequately address security-related maritime risks;
• Shipping alternatives: Evaluate contingency plans, including alternative sourcing, pipeline routes, or inventory adjustments; and
• Operational guidance: Monitor updates from maritime authorities, insurers, and industry organizations regarding navigation risk in the region.

Outlook

In the near term, the priority for regulators and industry stakeholders is to stabilize shipping conditions and ensure safe transit through the Strait of Hormuz.

Efforts coordinated through the International Maritime Organization may help establish a framework for secure navigation, but the timeline for restoring normal commercial operations remains uncertain.

Over the longer term, the disruption may accelerate broader trends already shaping global energy and logistics networks, including supply diversification, infrastructure investment, and increased attention to contractual risk allocation.

For businesses involved in global trade, the current situation highlights the importance of carefully drafted contracts, comprehensive insurance coverage, and robust contingency planning when operating in strategically important maritime corridors.

Businesses involved in Gulf trade and energy supply chains are facing growing uncertainty as disruptions in the Strait of Hormuz affect shipping routes, insurance costs, and contractual obligations. Our specialists advise companies on managing force majeure risks, reviewing commercial contracts, and strengthening supply chain contingency planning in the region. To arrange a consultation, contact dubai@dezshira.com.

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