The Middle East has entered a period of severe instability, with the Strait of Hormuz experiencing a rapid escalation in military activity, insurance withdrawal and commercial disruption.

While the situation continues to develop at pace, reporting confirms that tanker damage, missile strikes and operational uncertainty have transformed the risk landscape for those operating in marine, aviation and other cyber‑dependent sectors across the region.

As well as physical operations, the escalation is now affecting the digital systems and critical dependencies that underpin safe and resilient operations throughout the Middle East.

The current crisis is likely to materially increase the need for:

  • Guidance on war risk insurance withdrawal, coverage interpretation and claims.
  • Advice on contractual performance, force majeure and potential breach scenarios.
  • Assistance with operational risk mitigation including rerouting, incident response planning and regulatory compliance.
  • Support in cyber incident response and multi-jurisdictional claims management.
  • Strategic, cross‑sector counsel that helps clients anticipate how disruption in one domain may trigger exposures in another.

This multi-layered crisis requires integrated legal risk management to navigate its evolving commercial, legal and operational challenges.

A co-ordinated approach, drawing on marine, aviation and cyber expertise is essential to maintain resilience as the situation continues to shift. For more information contact, Stefanie Johnston, Jarrod Parker or Craig Kennedy.

Background

Marine Risk: War Risk Insurance Withdrawal and De Facto Route Closure

Stefanie Johnston, Partner (Marine)

Reports confirm that at least three tankers have been damaged and one seafarer killed following Iranian retaliation strikes in the Gulf. More than 200 vessels have anchored or rerouted away from the Strait of Hormuz amid missile and drone activity.

Iranian forces have issued radio warnings indicating that no ship is allowed to pass through the Strait of Hormuz. As a result, owners and charterers have suspended transits and several states have formally advised vessels to avoid the waterway.

In response to the developing situation, marine insurers and P&I Clubs have begun restricting or cancelling war risk cover for vessels entering the region.

Traffic through the strait has already fallen by roughly 70 percent, with more than 150 ships anchoring outside to avoid exposure.

The White House has directed the US Development Finance Corporation to offer political‑risk insurance for Gulf maritime trade and indicated the US Navy could escort tankers through the Strait of Hormuz if required.

The efficacy and scope of any such measures and their interaction with commercial war‑risk markets, voyage routing and cyber‑operational dependencies will be critical to watch.

In the coming weeks, clients should expect to see:

  • Charterparty issues such as force majeure, deviation, off‑hire and disputes over whether the voyage remains contractually safe.
  • Financing and mortgagee protection complications where continuous war risk cover is a contractual requirement.
  • Greater exposure to sanctions and safe‑port warranty disputes due to shifting geopolitical boundaries.
  • An increased need for casualty response as vessel damage and crew harm create multi‑jurisdictional claims.
  • Disruption arising from physical attacks on ports and associated infrastructure, affecting berth availability, cargo operations and the ability to safely enter or leave port, which may trigger further contractual, insurance and safety obligations.
Aviation Risk: Airspace Avoidance and Rising War Risk Premiums

Jarrod Parker, Partner (Aviation)

The conflict has also affected aviation operations, with damage reported at Abu Dhabi and Dubai airports and incidents involving aerial interceptions and fires at port‑adjacent facilities.

Missile activity across Gulf states has led aviation operators to reassess regional airspace exposure.

Insurers have begun raising premiums and limiting cover for flights over conflict‑affected zones, and airlines are adopting avoidance routes similar to those used during earlier periods of instability.

The combined impact on airports and airlines means operators are now facing significant safety constraints, disruption to ground and terminal operations, increased operational costs and a heightened risk of flight cancellations, diversions and regulatory restrictions that may further destabilise scheduled services across the region.

Implications for aviation clients include:

  • Route deviation and disruptions causing increased fuel costs, scheduling difficulties and potential passenger compensation liabilities.
  • Exposure to lease covenant breaches where specific war risk insurance thresholds or geographic limitations are required.
  • Liability disputes involving carriers, insurers and airport authorities arising from physical damage or business interruption.
  • Compliance obligations resulting from government‑issued airspace prohibitions or emergency notices.
  • Operational and safety impacts for airports where physical damage or security incidents disrupt runway availability, terminal operations and essential ground services, creating further knock‑on delays and liability considerations.
Cyber Risk: Heightened Threats to Navigation, Infrastructure and Supply Chains

Craig Kennedy, Partner (Cyber)

History has shown that geopolitical conflict in the region typically correlates with spikes in cyber activity targeting transport, navigation and critical infrastructure.

While current reporting is focused on kinetic strikes, increased cyber risk remains a foreseeable parallel threat.

It is likely to emerge as a form of asymmetric warfare, enabling actors to impose disruption and strategic pressure without further escalating direct military confrontation.

Issues likely to affect clients include:

  • Heightened risk of cyber attacks on operational technology including vessel navigation systems, engine management systems, port infrastructure, aircraft ground systems and airport operational technology, increasing the likelihood of loss‑of‑control incidents that could endanger crew, passengers and on‑shore personnel.
  • Disruption to vessel manoeuvring, cargo handling, and aviation ground and turnaround operations where compromised OT systems interfere with propulsion, steering, docking, runway movements or ground support equipment, raising the potential for collisions, groundings, runway incursions and other safety‑critical events.
  • Business interruption from cyber attacks that disable essential maritime and aviation systems such as routing platforms, load planning tools, fuel management systems, terminal operating systems, baggage handling, and gate management, creating bottlenecks, severe delays and knock‑on operational safety risks across ports and airports.
  • Greater exposure to ransomware and data manipulation attacks affecting safety‑critical datasets including cargo manifests, flight plans, electronic nautical charts, weather routing data and hazardous goods declarations, complicating regulatory compliance, voyage planning and emergency response.
  • Contractual and regulatory risk where cyber driven failures prevent parties from meeting core safety obligations under charterparties, aircraft operating agreements, port and airport regulations and wider supply chain contracts, including duties relating to seaworthiness, airworthiness, safe navigation and secure system operations.
Sector‑Wide Supply Chain and Commodity Impacts

Global supply chains also face mounting stress as the energy markets react sharply to the widening conflict.

Brent crude has already risen by around 7 percent to its highest level in months following attacks on tankers and fears of sustained disruption to regional exports.

This volatility is directly tied to the strategic importance of the Strait of Hormuz, which remains a critical transit corridor for global energy flows.

It carries significant volumes of crude destined for Asian markets and supplies up to 30 to 40 percent of European jet fuel, meaning even short term instability can reverberate through freight markets, aviation networks and downstream energy consumers.

These pressures are compounded by the heightened likelihood of cyber attacks on energy, logistics and transport infrastructure, where disruption to routing systems, terminal operations or fuel supply chains could further amplify the instability created by physical attacks and market volatility.

For clients across marine, aviation and energy linked sectors, the result is an environment where operational disruption, commercial uncertainty and regulatory pressure converge.

Firms will increasingly require advice on supply contract renegotiation, exposure to price swings, business interruption claims and the interpretation of contractual provisions where performance becomes uneconomic or impossible due to regional instability.

A Multi‑Layered Crisis Requiring Integrated Legal Risk Management

The unfolding situation demonstrates the speed with which geopolitical tensions can move from political headlines to direct commercial disruption.

Insurance withdrawal, operational uncertainty and increased cyber exposure have combined to create an environment where clients require coordinated legal, insurance and strategic guidance.

In practice, the crisis is no longer confined to one mode of transport or one class of risk.

Marine operators, airlines, airports, logistics providers, cargo owners, financiers and energy‑linked businesses are now dealing with interlocking challenges that span physical safety, insurance availability, contractual performance, digital operational resilience and regulatory compliance.

These pressures are converging simultaneously and across jurisdictions, creating a level of interconnected risk that individual contracts or policies cannot address in isolation.

Against this backdrop, we expect to see an increasing need for:

  • Guidance on war risk insurance withdrawal, coverage interpretation and claims.
  • Advice on contractual performance, force majeure and potential breach scenarios.
  • Assistance with operational risk mitigation including rerouting, operational resilience hardening and regulatory compliance.
  • Support in cyber incident response and multi-jurisdictional claims management.
  • Strategic, cross‑sector counsel that helps clients anticipate how disruption in one domain may trigger exposures in another.

This is a developing crisis, and clients will need clear, integrated advice to navigate its evolving commercial, legal and operational challenges.

A coordinated approach, drawing on marine, aviation and cyber expertise together, will be essential to maintaining resilience as the situation continues to shift.

For more information, please contact Stefanie Johnston, Jarrod Parker or Craig Kennedy.