Exclusive | Inside the quiet insurance racket Iran is running in the Strait of Hormuz and how it will devastate Western shipping
As high-stakes negotiations to end the Iran war continue in Switzerland, the maritime industry’s message to the White House is clear: Don’t allow Iran to formalize its tolling racket over the Strait of Hormuz.Iran wants all commercial shipping vessels to register with a newly formed Iranian agency in order to pass through the narrow entry to the oil-rich Persian Gulf — but Western insurance underwriters are refusing to comply, slamming the mandate as a sanctions trap, The Post has learned.Senior sources say unless US negotiators force Iran to completely dismantle its unilateral insurance mandates and fully clear international waters of underwater mines, trade in the region will never truly recover.“The current Iranian proposal or directive is unacceptable and not workable for commercial shipping,” one insider told The Post.“No country can unilaterally assert its jurisdiction over international waters.
That has to be respected.If it isn’t, you will not get transit back to pre-war levels.
It’s not possible.”Under the guise of a 60-day truce, Tehran’s newly formed Persian Gulf Strait Authority (PGSA) declared that all traditional shipping channels through the international waters of the strait are “prohibited.” To force compliance, Iran wants all commercial vessels to register with the PGSA and carry Iranian-approved insurance.But insiders told The Post that insurance firms are refusing to comply with a system they say is completely unworkable for the private sector.“They’re using the strait and their perceived control of the strait as an economic weapon against the United States and their allies,” a senior source briefed on the matter said on the condition of anonymity.“It’s basically an attempt to vandalize the global economy.”Tehran is dangling “free” insurance during the initial 60-day window, but the mandate explicitly reserves the right to levy steep premium fees down the line.Global firms warn that signing on the dotted...