The Strait of Hormuz Crisis: De Facto Closure in the Jugular Vein of Global Energy Trade and Its Legal Repercussions

The Strait of Hormuz, as the most critical transit point of global energy trade, is a massive strategic vein through which approximately 20 million barrels of oil and one-fifth of the global LNG trade flow daily. The coordinated military operation by the United States and Israeli armed forces against Iran on February 28, 2026, ignited an unprecedented crisis in the global maritime and energy markets. The Strait of Hormuz crisis, with the retaliation actions of the Islamic Revolutionary Guard Corps (IRGC) targeting maritime traffic in the Persian Gulf and especially in the strait, has turned the region into a de facto war zone in terms of commercial navigation and deeply shaken the dynamics of international maritime trade law.

The IRGC’s declaration of officially closing the strait to commercial transit on March 2, along with drone and missile attacks targeting ports and ships in the region, has reduced maritime traffic to almost zero. According to data from the analytics firm Kpler, traffic in the strait has plummeted by up to 90 percent; more than 150 tankers are anchored off the Gulf of Oman, awaiting updates on the latest situation of ship passage through the Strait of Hormuz and the possibility of safe transit. While Brent crude oil prices have exceeded $120, prices at the Dutch TTF, the European natural gas market hub, have doubled compared to the pre-crisis period.

Legal Status: The Strait is Open, but Ships Cannot Pass

Under the United Nations Convention on the Law of the Sea (UNCLOS), the regime of “Transit Passage” applies to straits open to international navigation, such as Hormuz. This regime does not grant coastal states the right to impede the passage of ships. Iran’s claim to apply the rules of “Innocent Passage” is incompatible with the fundamental principles of international maritime law; there is no strong legal basis for the unilateral closure of the strait.

However, the legal status and the commercial reality on the ground are rapidly diverging. Security risks in the region have led the market to make its own assessment without waiting for political decisions. The refusal of shipowners to send ships to the region in order not to endanger their assets and crew means a “de facto closure” even if the strait is legally open. In international markets, this picture is referred to as an “insurance-driven closure”: when insurers refuse to provide coverage, shipowners cannot risk the passage.

Contract Law: A Period to Read Clause by Clause

In international maritime trade, contracts of carriage and charterparty agreements are mostly subject to the rules of English maritime law. Unlike continental European systems, English law does not recognize the concept of force majeure as an independent legal principle; this concept can only be invoked if it is explicitly regulated in the contract. For parties without such a provision in their contract, the only option is the doctrine of frustration under English law, the acceptance of which is extremely difficult in practice. This legal framework constitutes one of the core areas of expertise of Esenyel Partners since its establishment. Charterparty disputes subject to English maritime trade law, LMAA arbitration proceedings, and coordinated case management conducted with London-based law firms are an integral part of our team’s daily practice.

In the contracts regulating the relationship between the shipowner using their vessel in maritime trade and the carrier undertaking the carriage of the cargo, the points that must be examined most carefully today are as follows:

• War Risk Clauses: The CONWARTIME 2013 clause, which is standard in time charterparties, and the VOYWAR 2013 clause in voyage charterparties grant the shipowner the right to refuse orders to enter areas declared high-risk by the Joint War Committee (JWC). The English High Court’s decision in The Triton Lark established that this assessment must be based on objective data and a real probability of danger, the current situation in Hormuz clearly meets this threshold. When this clause is triggered, the Additional War Risk Premium (AWRP) is usually charged to the charterer; however, the wording in the contract must be examined carefully.
• Safe Port Obligation: English case law requires not only the port itself but also the approach route to be safe. Considering that the Strait of Hormuz is de facto the only maritime entrance to the Gulf ports, ports such as Jebel Ali or Ras Laffan may be considered legally “unsafe” due to the risk in the strait passage, even if they are physically intact. In this case, the shipowner has the right to demand an alternative port from the charterer within the scope of the shipowner’s rights under war risks.
• Force Majeure: The BIMCO Force Majeure Clause 2022, which is the most common force majeure provision, covers a wide catalog of events such as war, blockade, laying of mines, and acts of terrorism. Indeed, major actors like QatarEnergy and Aluminium Bahrain immediately declared force majeure at the onset of the crisis. However, the declaration must be made in strict compliance with the time and procedural conditions stipulated in the contract. An erroneous force majeure declaration under English law may give the counterparty the opportunity to terminate the contract with a claim of repudiatory breach.
• Waiting Costs and Demurrage: Who will bear the waiting costs for ships anchored at the entrance of the strait is a critical question. In time charterparties, the ship generally remains on hire during the waiting period. In voyage charterparties, the risk of delay in principle belongs to the shipowner; however, the demurrage and exception clauses in the contract can radically change this distribution. It is an established principle in English law that general exception clauses do not automatically interrupt laytime or demurrage. The shipowner’s obligation of seaworthiness should also not be ignored; sending the ship to an active conflict zone could result in severe compensation risks.

Insurance Regime: War Risks and Coverage Crisis

While standard Hull and Machinery (H&M) and Protection and Indemnity (P&I) club insurances cover ordinary risks, entering regions like Hormuz triggers marine insurance war risk clauses. The JWC has expanded the definition of the high-risk area to include the territorial waters of Oman. As of March 5, P&I coverage for the region has been largely suspended; insurers are demanding exorbitant Additional Premiums (AP). Legally, although insurance companies do not have the right to arbitrarily withdraw from the policy, deviation or war risk exceptions in the policy texts allow for the narrowing of coverage. With reinsurance companies losing their risk appetite, finding coverage for the region becomes entirely impossible. Esenyel Partners closely manages the legal processes between shipowners and insurers in war risk coverage and policy scope disputes, within the framework of long-standing cooperation with world-renowned P&I clubs and insurance companies.

Turkey: Risks, Precautions, and Strategic Opportunities

For Turkey, the biggest short-term risk of the crisis is the inflationary pressure on industrial inputs caused by the increase in energy import costs. The T.R. Ministry of Transport and Infrastructure has raised the ISPS Code Security Level to 3, the highest level, for Turkish-flagged ships navigating in the region; instant tracking of NAVTEX warnings and continuous contact with AAKKM (Main Search and Rescue Coordination Center) have been made mandatory. On the other hand, this crisis paves the way for Turkey to rise again to the role of a critical energy corridor for Europe with strategic pipelines such as TANAP and TurkStream.

As Esenyel Partners, we are closely monitoring the legal and operational risks emerging in this complex process. The tension in the Strait of Hormuz and the legal confusion it brings oblige industry stakeholders to review their contract structures and operational protocols. The correct interpretation of war risk and force majeure clauses within the scope of charterparty agreements under English maritime law, the matching of coverage scope in insurance policies with the current risk map, and the clear determination of the contractual distribution of waiting costs are the fundamental keys to surviving such extraordinary crisis periods with minimum damage. As Esenyel Partners, we are always by your side on these issues under the leadership of Atty. Selçuk Sencer Esenyel and Atty. M. Türker Yıldırım.