War risk insurers have submitted cancellation notices for policies covering ships moving through the Gulf and Strait of Hormuz after US and Israeli attacks on Iran, brokers told the Financial Times. The unusual pre-market move signals rapid escalation as Iran launched retaliatory strikes against US bases across the Middle East.

Insurance prices for vessels transiting the Gulf had been about 0.25 per cent of replacement cost but could now jump by half, according to Dylan Mortimer of broker Marsh. For a $100mn vessel, this means coverage costs rising from $250,000 to $375,000 per voyage. Prices for ships calling at Israeli ports could also surge 50 per cent.

Underwriters' greatest concern centers on whether Iran might close the Strait of Hormuz, through which about a fifth of global crude oil flows. Some ship owners are already rerouting away from the waterway, with at least three vessels turning back on Saturday. An advisory firm reported ships receiving radio warnings from the Iranian Revolutionary Guard Corps claiming the strait was closed to shipping.