Brent crude price surge in March 2026 — a record dating back to 1988
Barrels per day lost — more than two 1970s oil crises combined
Brent crude price per barrel, up from $70 in just five weeks
Barrels released from strategic reserves — the largest release on record
On February 28, 2026, U.S. and Israeli forces launched strikes on Iran in what has become one of the most significant geopolitical events of the decade. For risk managers and insurance professionals, what's unfolding in the Persian Gulf isn't a distant headline. It is a masterclass in how interconnected, cascading risk can overwhelm even the most well-prepared organizations.
The Strait of Hormuz: The World's Most Dangerous Chokepoint
At the heart of this crisis is a 100-mile-wide waterway. Roughly 20% of the global oil supply normally passes through the Strait of Hormuz, and since Iran began blocking and attacking commercial shipping, that flow has been reduced to a trickle.
The IEA estimates the world has lost 12 million barrels per day — more than two of the 1970s oil crises combined. And the IEA's director warns that April will be significantly worse than March, because cargo ships that had already cleared the strait before the war began have now reached their destinations. In April, there is nothing in the pipeline.
The Strait of Hormuz has been identified in risk management literature as one of the world's most critical single points of failure for decades. What's different in 2026 is that the risk has materialized — suddenly, dramatically, and at a scale that has caught markets and organizations off guard.
Erike Young, RM Study Group
The Price Impact: From $70 to $116 in Five Weeks
The market reaction has been swift and severe. Brent crude surged roughly 55% in March alone — a record for the contract, surpassing even the 46% monthly surge during the first Gulf War in September 1990. At the pump, U.S. gas prices crossed $4 per gallon for the first time since 2022.
Analysts warn prices could climb to $120, $150, or higher if Iran's Kharg Island oil export facility — through which roughly 90% of Iran's oil flows — sustains significant damage. The emergency response has been historic: the U.S. and allied nations are releasing 400 million barrels from strategic reserves, and the U.S. has temporarily lifted sanctions on some Russian oil. But these are finite tools with an expiration date, likely mid-April.
Cascading Risk: This Is Not Just an Energy Problem
For enterprise risk managers, the Hormuz crisis is a textbook case in interconnected, cascading risk. A single geographic chokepoint is simultaneously triggering exposures across every risk quadrant of the enterprise:
Supply Chain Risk
Shipping costs and insurance premiums have surged globally. Cargo rerouting around the Cape of Good Hope is adding weeks and millions of dollars to delivery timelines for any shipment routed through the Gulf.
Inflation & Financial Risk
Bloomberg Economics placed U.S. CPI for March at 3.4% year-over-year, up sharply from 2.4% in February. Rising fuel prices are the primary driver — compressing margins across virtually every industry.
Business Interruption Risk
Companies dependent on just-in-time supply chains from Asia and the Middle East are facing significant operational disruptions. BI policies are being stress-tested in real time.
Agricultural & Tech Supply Risk
The Strait is not just a chokepoint for oil. Fertilizer access and high-tech supply chains also route through the region — meaning agriculture, manufacturing, and semiconductor sectors all carry secondary exposure.
Monetary Policy Risk
A sustained energy supply shock may box in the Federal Reserve, increasing the odds of a rate pause as officials weigh inflation against growth — with downstream effects on credit markets and capital costs.
Political & Liability Risk
D&O exposure is growing for publicly traded companies that failed to adequately disclose geopolitical supply chain risk in financial filings — particularly those with material Gulf energy or transit dependencies.
What This Means for Insurance Professionals
The Iran conflict is stress-testing every major commercial line of business simultaneously — and exposing gaps that many organizations didn't know they had.
- Marine & Cargo — Unprecedented Claims Activity
Ships are being attacked, rerouted, and stranded. War risk exclusions are being triggered at a scale rarely seen outside a world war. If your organization ships goods internationally, the question isn't whether premiums will rise — it's by how much, and whether your war risk endorsements are still adequate.
- Property & Business Interruption — Long-Tail Energy Claims
Parts of the world's biggest LNG plant have already sustained missile damage, with the owner warning repairs could take up to five years. Long-tail BI claims from energy-dependent manufacturers are accumulating. Review your period of indemnity limits against a 5-year repair horizon.
- Commercial Auto & Transportation — Fuel Cost Shock
Fleet operating costs are soaring alongside diesel prices. Commercial auto loss ratios are deteriorating in real time as fuel-exposed carriers absorb increased operational costs that no rate filing anticipated.
- Directors & Officers — Disclosure Liability
Publicly traded companies that failed to disclose geopolitical supply chain risks in recent filings are now facing growing D&O exposure as the materiality of those risks becomes undeniable. Securities class actions typically follow within 12–18 months of a price-impacting undisclosed risk.
- Political Risk & Trade Credit Insurance
War risk, political risk, and trade credit lines are all being tested simultaneously. Insurers who underpriced geopolitical risk in the post-2020 soft market are beginning to feel the consequences.
The Strait of Hormuz has been documented in risk management literature as a critical single point of failure for decades. The organizations being hurt most right now are not those that failed to identify this risk — they are the ones that identified it, labeled it low-probability, and failed to stress-test against it. Known risks that are underweighted are the most dangerous risks of all.
Questions Every Risk Manager Should Be Answering This Week
- Map your Gulf exposure immediately. Which suppliers, logistics partners, or energy inputs route through the Strait of Hormuz or depend on Middle Eastern fuel? What are your qualified alternatives, and how long would it take to activate them?
- Model your cost structure at $120, $150, and $180/barrel. What is your break-even at each price point? Which product lines or contracts become unprofitable first? Bring this analysis to your CFO and board before they ask for it.
- Review all insurance policies for war risk and political risk exclusions. Marine cargo, property, BI, and political risk policies all have exclusions that may now be actively triggered. Exclusions that seemed theoretical a year ago are very real today. Engage your broker immediately.
- Audit your BI period of indemnity limits. A 12-month BI limit was adequate for a standard supply chain disruption. It is not adequate for a 5-year LNG facility repair. Review your limits against realistic worst-case restoration timelines.
- Review your financial disclosures for geopolitical supply chain risk language. If your most recent 10-K, 10-Q, or proxy filing did not adequately disclose Gulf energy or transit dependencies as a material risk, engage your securities counsel now — before a securities class action does it for you.
- Put geopolitical risk on the board agenda today. Geopolitical risk is no longer a macroeconomic backdrop item. It belongs on the enterprise risk register and the board agenda, with a named owner, defined scenarios, and a documented treatment plan.
The Bottom Line
The job of a risk manager isn't to predict exactly when something will happen — it's to ensure that when it does, your organization is positioned to survive it. The Strait of Hormuz has been in every geopolitical risk framework for thirty years. The organizations navigating this crisis best are the ones that stress-tested against it.
This is not the first time a known, documented risk has been underweighted until it became a crisis. And it won't be the last. The question is whether your organization will be ready for the next one.
