Originally Posted by
Load Toad
The insurance costs alone will stop ships from going through the Straits - Iran doesn't have to sink any ships or hit many at all - even 1 - it's the risk of a 100 million dollar ship full of oil and crew getting hit in a war zone that makes the cost unbearable
Insurance companies and actuaries are experts at pricing in risk.
As long as the price of the risk (insurance premium) exceeds the return at current prices on the cargo, it's not worth moving.
Sure there's lots more in there, cost of doing nothing, value of extracting the ship from the Gulf to use elsewhere, etc, but that's the basic equation. If the market price doesn't provide a return after factoring in the risk (insurance premium), the load doesn't move.