On February 28th, Israel and the US launched Operation Epic Fury – a massive bombing campaign against military targets all over Iran. What most recall is that this caused the closing of the Strait of Hormuz. The more accurate story, however, is that even before missiles began flying and mines began exploding, the Strait closed itself. Daily transit collapsed from a baseline of around 138 vessels to single digits within 96 hours of the commencement of bombing, and by the time the Islamic Revolutionary Guard Corps (IRGC) formally declared the waterway shut, there was little traffic left to blockade.
When prices stop pricing
Additional war-risk premiums (AWRP), the surcharge that maritime insurance underwriters add when a vessel enters a designated high-risk zone such as the Persian Gulf, went from 0.125 percent to 2.25 percent of hull value in a matter of days after the onset of Epic Fury. This was the number most outlets reported. The number almost nobody reported, because it would have required looking at the underwriting data rather than only the headline rate, was 88: the percentage of hull underwriters who still had appetite to underwrite risk insurance for vessels transiting the Strait of Hormuz.
That gap between “insurance is technically available” and “trade is not happening” is where Boon Chuan Lim's (2026) research comes in. Lim finds that, above roughly 1 percent of hull value, the maritime insurance premium on the hull stops functioning as a clearing price. Premiums are still correlated with lower transit, but above the 1 percent threshold, each additional jump in the premium produces a much smaller drop in traffic than expected.
The explanation: a set of non-price mechanisms, which begin binding simultaneously once premiums rise above 1 percent of hull value. These mechanisms include: protection and indemnity (P&I) clubs, the mutual insurers covering crew injury and third-party liability; the CONWARTIME clause, a standard contract which permits a ship to refuse orders to enter maritime zones threatened by “war risks”; and reinsurance treaties which cannot be easily or quickly reinstated on temporary ceasefires.
All of these mechanisms make shipping through Hormuz riskier and more costly – and all of them show up in the transit data without directly impacting maritime insurance premiums. The limits of price-only thinking were made palpable in early May, when the Joint Maritime Information Center reported only five vessels transiting the Strait of Hormuz the day after the US’ establishment of a naval security corridor specifically designed to restore transit in the Persian Gulf. was announced by the US. A US-sponsored ceasefire thus turned out to be insufficient for maritime risk insurers to permit normal passage for commercial ships.
The more, the merrier
Mohamed Bouka and Moulaye Ismail (2026), working out of the University of Nouakchott, have built a composite maritime connectivity vulnerability index across 185 economies and 20 years of UNCTAD data. They find that port concentration alone is the dominant vulnerability channel for 72 economies, or nearly 40% of the countries surveyed, leaving many with a higher Herfindal-Hirschman Index (a measure of the dispersion of trade value across an exporter’s trading partners).
In other words, Bouka and Ismail show that a country with an array of maritime ports is empirically more resilient against severe trade shocks than a country with only one dominant port – no matter how large or advanced that port is. Years of consolidating diverse, dispersed ports into mega-hubs have thus made many countries structurally vulnerable to supply shocks even as they have powered huge expansions in global commercial shipping.
Lonely at the top
The third paper, published by the US’ National Bureau of Economic Research (NBER) just last month (Juhász et al. 2026), goes back to the issue of who controls the chokepoint – a question which Lim's price analysis and Bouka and Ismail’s structural analysis hint at but do not fully answer. Juhász et al. draw on six decades of digitised vessel movement data to extract five basic facts behind global commercial shipping:
Fact 1: Global shipping is highly concentrated, with the world’s five largest ports handling around 20% of all ship calls in the world (even as the lineup changes).
Fact 2: Containerisation, which demands cutting-edge container handling technology, has intensified that concentration of shipping activity in the top ports while dispersing it among lower-ranked ports.
Fact 3: The identity of the world's largest ports has changed substantially over the last six decades. In 1951, the year Juhász et al’s dataset began, New York and London dominated, but as of 2008, Singapore, Hong Kong, and Shanghai were the biggest players in global shipping – another consequence of widespread containerization as well as shifting supply chains.
Fact 4: State-owned companies account for a substantial and growing share of global throughput, as four of the top seven ports are state-owned (e.g. Ports of Shanghai and Hong Kong) or state-controlled (e.g. Port of Singapore).
Fact 5: Chinese public port ownership increases port scale for both Chinese and non-Chinese carriers, but efficiency gains (i.e. economies of scale) accrue primarily to Chinese vessels. For instance, within three years of a government port takeover, ships from state-owned carrier COSCO see nearly four times the number of calls and shorter turnaround times than non-Chinese ships.
Takeaways for decision-makers
Where does the latest research into maritime risk insurance, port concentration, and shipping routes leave the geoeconomic practitioner whose job is to move cargo, price risk, and shape policy?
For corporate treasurers, Lim shows that simply treating a quoted war-risk insurance rate as a green light means erroneously viewing the premium itself as the main risk indicator. The practical solution is not to ignore the premium (which remains informative below Lim’s threshold of 1 percent of hull value) but rather to explicitly build non-price constraints – P&I renewal cycles, charter-party refusal rights, and a reinsurance reinstatement lag that assumes two different dates for a formal ceasefire and a return to pre-crisis levels of commercial activity – into underwriting decisions.
Policymakers seeking geoeconomic security for their states should treat port concentration as a critical geoeconomic risk. If port concentration is a dominant vulnerability for nearly 40 percent of the world's economies, as Bouka and Ismail show, and ownership of physical infrastructure is increasingly concentrated in state hands rather than private ones, as Juhász et al. show, then chokepoint control is a question of both economic resilience and geopolitical balancing. As such, vulnerable states should commit to investments in “next-best” ports that can quickly substitute for dominant ports in times of crisis, as well as a renewed focus on the ownership of vital shipping infrastructure.
