Since our initial briefing in March on the impact of the Iran War on shipping[1] there have been almost daily updates on the situation in the Persian Gulf.
Since late March, vessels have been required (and some seemingly have agreed) to pay Iran’s Islamic Revolutionary Guard Corps (“IRGC”) $2million “toll” in yuan or cryptocurrency for safe passage through the Strait of Hormuz, although the exact application, mechanism and implications of this scheme are unclear[2], even setting aside sanctions risks.
On 8 April 2026, a 14-day conditional ceasefire was agreed between the U.S. and Iran. In the following days, however, it became clear that the parties were not entirely Ad Idem on what they had agreed. Although there were initial signals that the Strait of Hormuz could be re-opened, by 9 April it was clear that Iran was not going to allow freedom of navigation (at least without “toll” payments), in part due to ongoing hostilities between Israel and Hezbollah in Lebanon.
Talks held between Iranian and American delegations in Pakistan on 11-12 April failed to result in an agreement, leading to U.S. President Trump announcing a blockade of Iranian ports on 12 April, which began on 13 April.
On 17 April Iran declared the Strait open to commercial vessels following the 10-day 16 April Israel-Lebanon ceasefire[3]. However, the U.S. refused to end its blockade[4], and on 18 April Iran reversed course with the IRGC Navy warning that “no vessel is to move from its anchorage in the Persian Gulf or the Sea of Oman”[5] and attacking two Indian-flagged tankers[6] and a French-flagged container ship[7] attempting to pass the Strait. This was followed by the US Navy intercepting and seizing an Iranian-flagged cargo ship as part of its blockade[8].
As of 22 April, when the U.S.-Iran ceasefire was due to end, tension remains high despite President Trump unilaterally declaring an indefinite extension[9]. The U.S. blockade continues whilst Iran claims to have seized two container ships attempting to transit the Strait of Hormuz and to have attacked a third vessel[10].
In any case, the ceasefire never achieved a complete cessation of hostilities: as well as the Israel-Hezbollah conflict, Iran’s stance on Hormuz, and the U.S. blockade, there have been continued Iranian attacks on Arab states[11].
In this follow-up briefing, we explore how these developments may impact the issues we addressed in our initial briefing relating to war risks clauses, safe port undertakings, frustration, force majeure and exceptions clauses, and bunkers.
War risks
As the war continues and circumstances shift, the application of war risks clauses may change. As we noted in March, the question of whether dangers are qualitatively different from those deemed to have been accepted under the contract is often at issue. This will most obviously be an issue for contracts formed after the commencement of hostilities. However, the analysis will rarely be as simple as “no reliance on war risks clause for contracts formed after the start of war”. Where danger has materially increased, or changed in kind, then reliance may still be possible. For instance, risk levels may be very different as of the commencement of a purported ceasefire and following further hostilities. Likewise, risk assessment may shift as it becomes clear exactly how an announced blockade works in practice, or as IRGC policy shifts on whether to allow paying vessels (or those of a particular flag) to transit Hormuz, not to mention the developing U.S. approach to the payment of IRGC “tolls”. The exact phrasing of the war risks clause also matters – for instance, CONWARTIME 2013 and 2025 explicitly encompass risks that “existed at the time of” contractual formation. Equally, the construction of the contract as a whole must be considered – this kind of wording is unlikely to protect owners where they agreed to sail to a specific place or via a route that was already sufficiently exposed to the relevant risk.
Specific issues may also arise for vessels trapped within the Gulf. Even where an order to transit Hormuz can be refused under a war risks clause, it may be less obvious whether an order to sail within the Gulf will be covered, and engaging in intra-Gulf trading may be tempting, especially for time charterers stuck paying hire during weeks of inactivity. On the one hand, the conflict has not only endangered vessels transiting the Strait – numerous commercial vessels have been struck (or experienced near misses) whilst in or near the Gulf. On the other, the mere fact that there is some risk is likely insufficient, with a genuine appreciable risk being necessary. Likewise, although most war risk clauses allow for “judgment” or “discretion” by the master/owners, they usually explicitly or implicitly require a level of reasonableness.
Issues may also arise over whether moving from one place to another within the Gulf exposes a vessel to any greater danger than she would have been in had she stayed put, and what the contractual implications of this are. It is not immediately obvious where the line(s) should be drawn. Whilst some vessels have been engaged in intra-Gulf trade, and not every location in the Gulf has been struck, this does not automatically mean that it would be unreasonable to err on the side of caution. Further, the IRGC’s 18 April announcement demanding no movement from anchorage may indicate an increased risk.
Safe ports
Similar issues arise with safe port undertakings. Due to changing circumstances in the conflict, it may not be obvious whether a particular port is prospectively safe as of nomination. Whilst there may be a cessation of hostilities as of nomination, it may be less clear whether this is likely to hold until the vessel arrives. Likewise, even if a port is prospectively safe as of nomination, supervening unsafety may bring the secondary obligation into play. Further issues are likely to arise with the secondary obligation. For instance, if the entire Gulf region is unsafe, and unsafety cannot be avoided by vessels already within the Gulf due to the Strait being shut, is there any scope for avoiding danger by leaving or ceasing to sail to a particular port within the Gulf?
Issues may also arise over the geographical scope of undertakings. Although the approach to a port must be safe for the port itself to be safe, the question of whether this can sensibly extend to cover distances of hundreds of kilometres is debatable. Equally, if the only way to reach a port is via a particular route that is dangerous (such as via Hormuz or via a particular route within the Gulf), it may indeed make sense to treat the port as being unsafe.
Frustration, force majeure and exceptions clauses
Whilst frustration remains a high bar, arguments for frustration appear stronger than when we wrote in March. Despite a more positive outlook emerging on announcement of the conditional ceasefire, developments since then have thrust trade in the Gulf back into considerable uncertainty. Passage through the Strait may now be prevented not only by threats of Iranian attack and mines, but also by the U.S. blockade, practical and legal constraints by way of IRGC “tolls” carrying sanctions risks, and mounting prospects of a more protracted conflict. As a result, parties are more likely now to have a more robust basis upon which to argue that their contractual adventure has fundamentally changed.
Matters have shifted beyond mere delays and costly war risk premiums, as shippers face the added prospect of naval interdiction, adverse legal consequences, and prolonged periods of restraint. Still, much will turn on a charter’s purpose, duration, and geographic scope: a single voyage charter premised on loading or discharging in the Gulf may present a stronger frustration case if access is (objectively assessed) indefinitely denied, whereas a long-term period time charter with worldwide trading is unlikely to be frustrated where the vessel can be redeployed elsewhere. There is, however, a spectrum. What about a short-term trip time charters or a multi-voyage charter? And what about vessels that remain stuck in the Gulf? The answers may, unfortunately, not be straightforward (and will vary between contracts), especially as circumstances continue to develop.
As for force majeure and exceptions clauses, these too may be more likely to bite – but parties remain subject to their particular contract terms which will vary case to case and should be read carefully. Blockades, war, hostilities, acts of government, and sanctions may feature in carefully drafted clauses. Many such clauses will contain a minimum period which must elapse before relief (such as termination rights in favour of an affected party) will become available. Given the ongoing disruption in the Gulf, spanning now almost two months and showing no signs of reaching a clear and final resolution anytime soon, such rights are now more likely to be successfully invoked. Indeed, Kuwait Petroleum Corporation confirmed in a statement on 20 April a declaration of force majeure in respect of its oil and petroleum exports as a result of the Hormuz blockade[12].
Bunkers
We noted in March that bunker prices had already doubled and that further price hikes were probable. Further increases have indeed been seen, although prices remain incredibly volatile as the trajectory of the conflict remains uncertain. The price of oil surged by more than 7%, above $100 per barrel[13], when the U.S. announced its blockade. It then plunged after Iran announced the opening of the Strait[14], before surging after the U.S. continued its blockade and Iran reversed course on Hormuz[15].
The ongoing state of uncertainty on this front continues to have cascading effects across the industry. Parties tied to existing contracts should carefully consider their options, contractually and at common law (if governed by English law), and, if termination or other relief is unavailable, should prepare for rerouting, port congestion, disrupted supply chains, and higher operational and insurance costs. Disponent owners, in particular, who may be squeezed from both sides of the charter chain, should carefully review both head and sub charterparties for any conflicts or gaps which might leave them exposed.
Broader concerns
Despite the small measure of optimism that came with announcement of the conditional ceasefire and proposed reopening(s) of the Strait, matters in the Gulf remain fragile and unclear, and pressures on the shipping industry (and more generally on international trade) continue to mount. New pressure points have emerged with the U.S. blockade and President Trump’s warning that shipowners who have paid an “illegal toll” may see their vessels intercepted[16]. I.e., the option of paying the IRGC’s “toll” may no longer carry a risk only of non-compliance with sanctions, but also active threats from the U.S. navy. As for sanctions, sanctions clauses protecting owners from being asked to perform “sanctioned activities” (see e.g., BIMCO’s GENCOA Sanctions Clause for Contracts of Affreightment 2022) may come into play, as may issues concerning illegality and public policy.
Broader questions as to the future of shipping are also arising. Even if hostilities do wind down, for how long will the Gulf region be viewed as higher risk than it was before the War? For how long will bunker prices remain volatile and/or high, given that the disruption to the oil industry will not be resolved quickly[17]? How does the IRGC’s “toll” compare with other charges imposed by state authorities for passage through waterways? Are we at risk of setting a dangerous precedent that undermines the fundamental principle of freedom of navigation in international law? The Suez Canal, for example, is permitted to be tolled – being an artificial waterway (unlike the Strait) – such that the Egyptian Suez Canal Authority has generated considerable revenue over the years. Notably, however, that revenue has enabled investment in maintenance and improvement projects on the canal, facilitating commerce rather than impeding it. Extension of a “tolling” system to the Strait of Hormuz may lead other nations controlling vital waterways to push for a charging system, such as in the Strait of Bab al-Mandab which connects the Arabian Sea to the Red Sea. The consequences of that could ripple across the industry and materially alter the legal norms that have long governed the maritime sector.
For information about how 36 Stone can assist with matters involving shipping and international trade, please contact Senior Clerk, Reiss Nott – Reiss@36stone.co.uk
Authors: Emile Yusupoff and Bethany Smith, Members of 36 Stone
[1] https://36group.co.uk/wp-content/uploads/2026/03/Strait-talking-36-Stones-briefing-on-the-impact-of-the-Iran-war-on-shipping.pdf
[2] https://www.lloydslist.com/LL1156856/Shipping-seeks-clarity-over-Tehran-toll-booth-requirements-for-Hormuz-safe-passage#:%7E:text=However%2C%20there%20is%20a%20risk,go%2C%E2%80%9D%20the%20lawyer%20added
[3] https://www.reuters.com/world/middle-east/irans-foreign-minister-says-passage-vessels-via-hormuz-strait-is-open-during-2026-04-17/
[4] https://www.nbcnews.com/world/iran/live-blog/live-updates-israel-lebanon-ceasefire-trump-iran-talks-hormuz-summit-rcna332294
[5] https://www.bbc.co.uk/news/articles/cx2631x6nelo
[6] https://www.ndtv.com/world-news/2-indian-flagged-vessels-attacked-by-iran-gunboats-in-hormuz-crew-safe-sources-11376143/amp/1
[7] https://www.ndtv.com/world-news/2-indian-flagged-vessels-attacked-by-iran-gunboats-in-hormuz-crew-safe-sources-11376143/amp/1
[8] https://www.bbc.co.uk/news/articles/c239500dx8ro
[9] https://www.reuters.com/world/asia-pacific/us-will-indefinitely-extend-ceasefire-unclear-if-iran-agrees-2026-04-22/
[10] https://www.bbc.co.uk/news/live/cx297218m9vt
[11] https://www.longwarjournal.org/archives/2026/04/irans-war-against-regional-states-uae-bore-the-brunt-iraqi-kurdistan-still-under-fire.php
[12] https://www.reuters.com/business/energy/kuwait-declares-force-majeure-oil-shipments-amid-hormuz-blockade-bloomberg-news-2026-04-20/
[13] https://www.ft.com/content/4dbf076f-004b-4244-8579-2aca3e60e05c?syn-25a6b1a6=1
[14] https://www.bbc.co.uk/news/articles/ckg045z73z1o
[15] https://www.bbc.co.uk/news/articles/c5yjzy35825o
[16] https://www.cbsnews.com/news/trump-strait-of-hormuz-blockade-iran/
[17] https://www.reuters.com/markets/commodities/opening-hormuz-is-easy-part-restoring-oil-flows-isnt-2026-04-20/#:~:text=The%20IEA%20estimates%20that%20around,restoration%20of%20disrupted%20supply%20chains
Further information
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