Hormuz Tanker Attacks Hit a Wartime High: Is Your Crude or LPG Cargo Covered Through an Offshore Ship-to-Ship Transfer?

The week of 28 September to 5 October 2026 produced at least 12 attacks on oil, LNG and LPG tankers around the Strait of Hormuz, the highest weekly count since the Iran war began, according to Baird Maritime and a Reuters report carried by Voice of Emirates on 7 October. Bloomberg reported on 6 October that UKMTO had already logged nine attacks in the waterway in October, six days into the month.

One of those attacks landed close to home. On 6 October India's Ministry of External Affairs said crew on a Panama-flagged tanker had been injured by an unknown projectile while crossing the strait. Al Jazeera reported the next day that the vessel, the On Peace, was struck about 9 nautical miles off Limah, Oman, and that 17 of its 19 crew were Indian, with at least 12 injured, 11 of them Indian.

The volume picture runs the other way. Kpler estimates that about 40% of Gulf exports now bypass the strait, and that much of the crude still crossing it is transferred between tankers offshore. Gulf flows excluding Iran recovered to over 81% of pre-war levels in September (Al Jazeera, 6 October). Cargo is moving, but more of it is changing hulls at sea on the way.

For Indian refiners, LPG importers and petrochemical buyers, that is the insurance problem this post addresses. A ship-to-ship (STS) transfer adds a step that most marine cargo open covers were not drafted around: the cargo leaves one insured conveyance mid-voyage, in open water, often in or near a war-risk area, and joins another. Whether cover follows it depends on wording most buyers have not read since the last renewal.

A conventional crude or LPG parcel has one loading port, one vessel and one discharge port. The open cover declaration names them, the war-risk rate is applied to that voyage, and the transit clause tells you when cover attaches and when it ends. An STS operation breaks that chain in three places.

1. The vessel changes. The declaration may name the mother vessel, while the cargo arrives on a daughter vessel your underwriter never vetted. Vessel quality, flag and classification requirements apply to every carrying vessel, not just the first one.
2. The route changes. Transfer points sit off Oman, in the Gulf of Oman or further out, depending on where the seller or trader chooses to lighten or relay. That may be a different place from the one priced in the declaration.
3. A new handling risk appears. Pumping crude or LPG between two moored ships at sea carries its own exposures: hose failure, leakage, contamination, mooring damage, and shortage measured at a new transfer point.

None of this automatically voids cover. It does mean that the questions a claims handler will ask after a loss (which vessel, which leg, which clause, which notice) all have more than one possible answer. The checklist below is built to close those answers off before shipment, not after.

Vessel vetting for the daughter tanker is covered separately in our post on the Institute Classification Clause and Hormuz's shadow fleet. This post assumes that check is done and focuses on the transfer itself.

Start with the transit clause, because that is what decides whether the cargo is insured at the moment it is in the hose.

Marine perils

Crude parcels are commonly insured on bulk oil wordings, while LPG and petrochemical cargoes may sit on Institute Cargo Clauses with product-specific conditions. Either way, the transit clause defines a start point (typically when cargo leaves the shore tank or is loaded), an end point (discharge into the receiving tank or warehouse, or a fixed period after arrival), and how transhipment is treated. Ask three questions of your wording:

• Does it treat an at-sea STS transfer as transhipment within the ordinary course of transit, or is transhipment only contemplated at a port?
• Is leakage or loss during transfer through connecting hoses named as a covered peril, and does that extend to an offshore transfer rather than a terminal one?
• If the daughter vessel waits or drifts before proceeding, does any time limit start running from the transfer?

War perils

Cargo war cover is narrower. It is waterborne cover: it attaches when the goods are loaded on the oversea vessel and ends on discharge or after a fixed period from arrival at the final port. Ask your underwriter in writing whether cargo in transit between two oversea vessels, at sea, remains continuously on risk under the war clauses, and whether any waiting period at the transfer location counts against the post-arrival time limit. A written answer on the declaration or by endorsement is worth far more than a broker's email after a strike.

Most Indian importers of crude and LPG insure through an open cover with per-shipment declarations. The declaration is where STS cargoes most often go wrong, because it is completed from the purchase contract, and the purchase contract is often silent on how the seller will deliver.

What the declaration should carry for an STS cargo:

• Both vessels, by name and IMO number, or a clause allowing substitution of a carrying vessel subject to the policy's vessel requirements.
• The transfer location, at least as a defined area, so the underwriter has priced an offshore transfer in or near a listed war area rather than a direct port-to-port voyage.
• The sequence, including any lightering, waiting or relay leg.

Under the Marine Insurance Act, 1963, a change of voyage or a deviation without lawful excuse can discharge the insurer from the time of the change. Standard cargo wordings soften this with a change of voyage or held covered clause, but held covered usually depends on prompt notice and acceptance of an additional premium. A buyer who learns of an STS leg only from the bill of lading after discharge has not given prompt notice of anything.

Cargo war and strikes cover in an open cover is normally cancellable on short notice, typically seven days for war and shorter for strikes in some markets. That right is the underwriters' main lever in a conflict that has produced a record attack week.

The STS problem is timing. A cargo can be declared and attached before a cancellation notice is issued, then be transferred to a second vessel after the notice expires. The questions to settle:

1. Does cancellation apply only to cargoes that have not yet attached, or can it bite on a cargo already in transit that moves to a new vessel?
2. Is an STS transfer treated as the start of a new transit for cancellation purposes, or as a continuation of the original one?
3. If a cancelled area is re-opened at a new rate, does the new rate apply to cargo already attached, and who pays the difference?

The rate environment explains why underwriters are using these levers. The National reported on 17 July that war-risk premiums for Hormuz transits were quoted at 3-10% of hull value, against 0.25% pre-war. Hull war premium is the shipowner's cost, but it comes back to cargo through freight and surcharges, and cargo war rates move with the same perception of risk. Who absorbs those surcharges under your sale contract is a separate question, covered in our post on Hormuz war-risk surcharges and Incoterms allocation.

The attacks this month did not only damage ships. They make operators pause, divert and wait. For an STS cargo that can mean a daughter vessel held at the transfer area, a mother vessel unable to proceed, or a relay abandoned partway.

Marine cargo policies generally exclude loss caused by delay, even when the delay is caused by an insured peril, and war clauses commonly exclude claims based on loss of or frustration of the voyage. That leaves three realistic outcomes for an interrupted STS cargo:

• Physical loss or damage to the cargo from an insured peril (a strike that ruptures a tank, contamination from a damaged hose, fire) is the core claim and should respond, subject to the attachment checks above.
• Extra costs of forwarding, storage or re-transfer may be recoverable where the policy has a forwarding charges clause and the interruption arises from an insured risk.
• Loss of market, demurrage and refinery downtime are not marine cargo losses. They sit, if anywhere, in contingent business interruption or in trade contract terms.

What a stranded-cargo claim actually pays, and why frustration claims rarely succeed, is covered in our post on Hormuz war-risk stranded cargo claims. For the refinery and downstream side of a supply interruption, see our analysis of crude import shortfalls and contingent business interruption.

A further point for STS cargoes: if a vessel is struck while cargo is aboard, general average may be declared. Cargo interests will be asked for security before release, and a cargo split across two vessels can face two separate general average adjustments, one per hull.

STS transfers add a measurement point. A shortage on outturn can arise at loading, at the transfer or at discharge, and the claim will only succeed if you can show where it happened and that it falls within the policy's shortage terms and any excess.

Practical steps:

• Appoint an independent surveyor for the transfer itself, not only at load and discharge, and require ullage reports and samples from both vessels before and after the transfer.
• Keep both vessels' documents: transfer logs, hose and fender certificates, the STS operation plan, and any master's protest.
• Check the excess. Bulk shortage claims usually sit behind a percentage excess on the insured value. A transfer that adds a measurement point can push a borderline loss over or under it.
• Preserve subrogation. If the transfer operator or either vessel caused the loss, your insurer will want to recover. Do not sign releases or settle with the carrier without the insurer's agreement.

For LPG, the issues are different in detail but similar in principle: temperature and pressure records from both vessels, and evidence of any venting or boil-off during transfer, decide whether a loss is insured or treated as normal transit loss.

Run this per cargo while the attack count remains at its current level:

1. Confirm the delivery plan with the seller: direct voyage or STS, and if STS, the receiving vessel and transfer area. Vet every carrying vessel against the policy's classification and sanctions requirements, not only the first.
2. Declare both legs on the open cover, with the transfer location, before the cargo attaches.
3. Get written confirmation that marine and war cover continue through the transfer, how any waiting period counts against time limits, and which cargoes stay protected (and at what rate cover is reinstated) if a seven-day cancellation notice is issued mid-voyage.
4. Appoint a surveyor for the transfer and set the documentation list in advance.
5. Align the sale contract so the party bearing the STS risk is the party whose insurance responds, and so surcharge allocation is agreed.
6. Map the non-marine gaps: delay, loss of market and refinery downtime belong in business interruption planning, not in the cargo claim.

The On Peace attack shows that Indian crews, and by extension Indian-linked cargo, are directly in the path of this conflict. The cargo is still getting through. Make sure the cover is getting through with it.