Since the start of the conflict, the phrase “breach of international law” has reverberated across the airwaves. That is true, in part, but the repercussions on the world stage are likely to be unclear for some time whilst commercial shipping is left to pick up the pieces in the short to medium term.
As foreshadowed in our 2026 horizon scanning report, the disruption in the region has continued unabated. That disruption has been further exacerbated by the conflicting positions of the US and Iran, and their respective actions before, during and after the ceasefire. A VUCA (“Volatile Uncertain Complex Ambiguous”) environment is the only constant.
In similar fashion, the idea that the Strait of Hormuz is ‘closed’ has been propagated whilst in reality the answer is more likely that it is ‘closed, but not to all’. With the US Vice President having declared that “two can play that game”, the latest blockade is a retaliatory step. The tit-for-tat approach between the US and Iran is not new; in 2023 the ADVANTAGE SWEET was seized by the IRGC seemingly in retaliation for the apparent seizure of the tanker SUEZ RAJAN for carrying sanctioned Iranian crude. A series of further seizures of vessels by the IRGC ensued whilst the sanctions programme enforced by the US (and its allies) against Iran has increased significantly.
There is now recognition by international maritime bodies of two conflicting approaches in the Persian Gulf: (i) the IRGC asserting that they control passage through the Strait of Hormuz, and (ii) the US military's announcement of a full “BLOCKADING” of all maritime traffic entering and exiting Iranian ports. This is the second blockade conducted by US forces during 2026, having undertaken similar measures in Venezuela during January. Neither event bears close scrutiny as a matter of international law.
For example, blockading a state’s territorial waters and ports may contravene Article 2 (4) of the UN Charter. Similarly, the UN Convention on the Law of the Sea (UNCLOS) provides for freedom of navigation. That does not, however, appear to dissuade the approach of US forces in the region. There is no single “UNCLOS Act” incorporating the convention wholesale into English law but statutes, such as the Merchant Shipping Act 1995, invariably reflect the UNCLOS navigation regimes. There is, however, unlikely to be any realistic recourse for commercial entities against the states involved and the legal ramifications as between state actors are unlikely to be resolved quickly.
The position for ship owners, charterers, cargo interests and their respective insurers therefore continues to hang in the balance. Under English law, it is recognised that a blockade is a restraint on the marine adventure, provided the blockade is effective. That will be a question of fact in every case.
However, the threshold as to whether a restraint has in fact occurred is such that it is likely to be relevant only to those vessels unfortunate enough to be stuck to the west of the Strait and those in Iranian waters/ports when the music stopped. Fear of loss is, ordinarily, not sufficient to engage cover and it is unlikely that a restraint will be deemed to occur if a vessel voluntarily refrains from entering a port for fear of becoming subject to a blockade.
Marine traffic data suggests vessels have during the course of the last two days approached the Strait from both sides and have promptly ‘U’ turned. For those vessels to the west of the Strait, the position remains precarious, despite suggestions that the IRGC is open to providing written approval for passage. The suggestion that monies must change hand for such approval almost certainly gives rise to potential sanctions issues. One may question the legitimacy of such an “approval”, both from operational and compliance perspectives.
VLCC’s, that may otherwise have had permission from the IRGC to transit, now face the prospect of becoming victim to the US blockade should they enter the Persian Gulf. President Trump’s commercial proposal is for empty tankers to instead transit to, and load in, the US where he asserts there is an abundance of oil.
