Coverage of Iran war
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Airbus revises aircraft demand as Iran War impacts industry
Airbus revised its passenger aircraft demand by 1%, citing the fallout from the Iran War and global trade tensions. The revision marks the end of a sustained period of growth for the industry, as it seeks to rebound from the COVID-19 pandemic.
Oil Tankers Continue to Navigate Strait of Hormuz
Oil tankers are continuing to navigate the Strait of Hormuz, in the face of recent attacks on an oil tanker and a container ship according to ship tracking data.
Recently there was a drone attack on a Singapore-flagged cargo ship and a Panama-flagged merchant vessel on Thursday and Saturday, both of which have been blamed on Tehran.
This willingness of shipping companies to continue to move through the Strait is reflected in a desire to ensure that more oil barrels can supply the global oil market. The price of Brent futures recently fell below $71 for the first time since the war started.
Insurers Seek Clarity Over War Clauses
Media reports say that Russian submarines targeting subsea cables in UK waters or Chinese drones flying over US territory “might provoke a global emergency but would not necessarily be acts of war,” according to new policy language being debated by the Lloyd’s Market Association trade body.
According to an FT article, “Insurers at Lloyd’s of London are examining the wording of the so-called Five Powers exclusion, standard in marine contracts, which stipulates that coverage would be cancelled if war broke out between any of the US, UK, France, China or Russia.”
Airlines Fear Winter Flight Disruption
Airlines are preparing to slash their winter flight schedules, with the potential for planes to be grounded and tens of thousands of flights cancelled if jet fuel prices remain elevated, according to the Financial Times.
The Iran war is causing sleepless nights for senior corporate executives across industries and sectors, as the conflict’s ripple effect outside of the Middle East continues.
The Iran War is impacting global entertainment events
Russell hosted a webinar examining how the Iran War is impacting major entertainment events including the FIFA World Cup.
What follows is a round-up of some of the key discussion points from that session.
European Airlines Raise Alarm over Looming Shortage
Leading European airlines including Air France & KLM have been forced to introduce surcharges on long-haul flights, in response to growing concerns about commercial jet fuel inventories across Europe.
Globally, airlines are scrambling to respond to rising fuel costs, that typically make 20%-40% of their operating costs.
Jet Fuel Shortage Threatens Major Airline Disruption
All the major airlines, underwriters and insurance brokers in the specialty risk market are on high alert now that Europe reportedly has just six weeks’ worth of jet fuel remaining due to the ongoing Middle East conflict.
With major airlines grounding flights, there are fears that more prolonged geopolitical uncertainty will lead to even more cancellations if oil supplies continue to be restricted by the Iran war.
Iran War Raises Concerns around Risk Accumulation and Effective Underwriting
The Iran War has highlighted the issue of unquantified risk accumulation and is impacting underwriting portfolios, according to attendees at our webinar.
The webinar, “Iran War: Six Weeks On”, explored the impact of the Iran War on the global economy and on the insurance classes
During the webinar, attendees which included representatives from corporates and (re)insurers, were asked a series of questions. The most pressing concern was around areas of risk accumulation:
- 73% agreed with the following statement: “would you agree that the war has highlighted key unquantified areas of risk accumulation such as ports & airports”.
Southeast Asia suffers trade fallout as Iran war reaches one month
Japan, India, South Korea, China along with a host of other nations are experiencing disruption to their trade from the month-long war in Iran, because of commodity shortages, according to our analysis.
Crude Oil and LNG are the main commodities impacted from the conflict in the region.
Further analysis can reveal that 64% of all crude oil exports and 96% of all LPG exports in the month of the war are currently trapped in the Strait of Hormuz, and were scheduled to head to the following nations:
- India
- China
- Thailand
- Indonesia
- Japan
- South Korea
- Singapore
- Taiwan
$12 billion of aircraft at risk after drone attack at Dubai Airport
119 aircraft with an estimated market value of $12 billion were at risk after Dubai airport was targeted by a drone attack on Monday, according to our analysis.
The news comes as British Airways have cancelled all flights to Dubai until at least June, making it the first major airline to do so.
British Airways, along with Emirates, mainly operate most of the flights from Heathrow to Dubai:
- Emirates – 4,476 flights
- British Airways – 2,168 flights
Not the first time that tensions have been high in the Strait of Hormuz
This is not the first time that has been there have been tensions in the Strait of Hormuz.
Back in 2019, there were tensions between UK and Iran after a UK tanker was stopped in the Strait of Hormuz by boats from the Islamic Revolutionary Guard. Our analysis at the time suggested that such an event would have generated a $3.1 billion hit to the UK economy.
$315 million of cargo hit by attacks
The following vessels were struck by Iranian missiles that were carrying a combined $315 million of cargo according to our analysis:
- Safesea Vishnu
- Zefyros
- Mayuree Naree
- One Majesty
- Star Gwyneth
Countries Most Exposed from Conflict
Our forecasts of Q1 trade in 2026 shows the following countries most exposed:
- Trade through Strait of Hormuz in Q1 2026 is estimated to be $167 billion.
- 70% of trade is to China, India, South Korea & Japan.
- 87% of trade is from UAE, Iraq, Kuwait, Qatar & Saudi Arabia.
23% of global crude oil is through Strait of Hormuz
The Strait of Hormuz is a key artery for supplying crude oil according to our analysis:
- Annual Crude Oil Trade: $407 billion.
- 23% of all global crude oil trade is through the Strait of Hormuz.
$3.5 billion liability for key sectors
The approximate liability for companies across the region is as follows:
- Finance, Insurance and Real Estate Insurance Liabilities: $1.9 billion.*
- Manufacturing Insurance Liabilities: $1.6 billion.*
*Figures are indicative estimates based on sector-level revenue benchmarking and do not represent projected insurer balance sheet liabilities.