Mark Gagnon

But now look at us.

This isn't one single dramatic act, right?

Based on a lot of early reporting, what appears to have unfolded is a combination of

Mine-laying operations, like literally putting down mines and explosives in the water, anti-ship missile deployments, and small boat swarms patrolling the shipping lanes.

And really explicit warnings from Tehran, the capital of Iran, that any vessel attempting to transit the Strait did so at its own risk.

Some tankers with military escort have reportedly continued with limited passage, but for most commercial operators, the Strait has reportedly become just a no-go zone.

though a full closure has not been independently confirmed.

But again, you don't have to close it.

It's not like they have a gate or a drawbridge or something.

They just need to make it volatile and turbulent enough to that insurance companies and private shippers don't want to use it.

Commercial shipping insurers responded immediately.

According to early reports, Lloyd's of London and other major maritime insurers either suspended coverage for Gulf transit vessels or put like a war risk premium so high that transit became just

you know, unviable.

To put that into plain terms, basically in past incidents in the Strait of Hormuz, these insurance companies will put on war risk premiums that have increased tenfold within 48 hours.

So when your insurance costs more than the cargo is worth, you just can't sail.

It makes no sense.

If you have a billion dollars worth of cargo, but the insurance is 1.5 billion, you're

half a billion dollars.

So the reported effects, if sustained, would be staggering.

Global oil prices reportedly spiked dramatically.