HomeMaritime CalculatorsRed Sea and Hormuz Premiums: the real go/no-go line

Red Sea and Hormuz Premiums: the real go/no-go line

September 22, 2025

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VLCC rates are hot and routing choices now decide margin. This morning’s report gives shipowners a clear line between Suez with premiums and Cape without, then shows exactly how war risk, canal fees, bunkers, and time in zone move your dollars per day. Start with the quick signal panel, check the go or no go table, run the calculator with live quotes, and lock your fixing, routing, and speed with confidence.

Use this split explainer, calculator, and scenario grid to decide Suez with war-risk or Cape of Good Hope without. Keep your pricing, routing, and security plans aligned with live premiums.

90-second summary
  • War-risk and H&M adders can flip net voyage economics on trades touching the Red Sea or the Strait of Hormuz.
  • Compare two cases each time you price. Case A is Suez plus premiums. Case B is Cape with extra days and fuel but no war-risk exposure.
  • Your decision threshold is the premium percent on hull that makes the two routes equal on a per-day basis.
Key definitions
  • War-risk premium - additional premium quoted for time in a listed risk area.
  • H&M adders - temporary surcharges on hull and machinery cover tied to routing and exposure.
  • Time in zone - the hours your declared route spends inside the listed area that the quote applies to.
Premium bands
  • Low - benign conditions and stable advisories.
  • Base - normal alert level and routine checks.
  • High - elevated advisories or recent incidents.
Typical time in zone

Varies by declared route and speed. Use your security plan and expected waypoints to estimate hours in the listed area. Quotes are often sensitive to time in zone.

Go or No-Go table
VLCC - AG to Asia, single voyage lens
Factor Suez with war-risk Cape without war-risk
Exposure and fees War-risk H&M adders plus canal tolls No war-risk, no canal tolls
Voyage days Shorter distance, add time in zone Longer distance via Cape
Fuel pattern Lower burn, higher fixed costs Higher burn, lower fixed costs
Schedule risk Advisory driven delays and inspections Weather and Cape refueling cadence
When it wins Premiums are modest, canal is flowing, firm delivery timing Premiums are elevated or volatile, schedule flex allows longer leg
Quick actions for owners
  • Bind quotes on the same day you fix to avoid gap risk.
  • Model Suez versus Cape with the calculator below before you counter.
  • Align crew, security, and fuel plans with the chosen corridor.
Quick actions for charterers
  • Clarify allocation of war-risk and routing costs in the CP.
  • Offer optionality bands tied to premium thresholds.
  • Request proof of binding and declared routing before release.
Decision calculator
Fill the inputs, then click Calculate
Inputs
Assumptions

If revenue is left blank the tool shows relative economics and the break-even premium percent.

Outputs
Net TCE via Suez
-
Net TCE via Cape
-
Break-even war-risk percent
-
Payback days if rerouting to Cape
-
Scenario grid
Columns are Low, Base, High premium. First row is Tight AG list. Second row is Normal AG list.
Tight x Low
Preferred route: Suez. Pricing stance: hold firm. Laycan advice: widen modestly. Security posture: routine checks.
Tight x Base
Preferred route: based on break-even. Pricing stance: constructive. Laycan advice: keep options. Security posture: standard plus.
Tight x High
Preferred route: Cape. Pricing stance: ask up. Laycan advice: widen. Security posture: enhanced.
Normal x Low
Preferred route: Suez. Pricing stance: competitive. Laycan advice: standard. Security posture: routine checks.
Normal x Base
Preferred route: based on break-even. Pricing stance: neutral. Laycan advice: standard. Security posture: standard plus.
Normal x High
Preferred route: Cape. Pricing stance: quicker to fix if long days. Laycan advice: keep options. Security posture: enhanced.
Cells update color when you calculate. Green indicates the winning route given your break-even premium.

Voyage P&L decision aids

Side by side data for Suez and Cape, a practical checklist and clause box, a live signal panel, and a print-ready briefing sheet.

Waterfall inputs
Enter voyage assumptions and press Render
Suez with war risk
Net TCE: -
Cape without war risk
Net TCE: -
Checklist
  • Fresh quotes from brokers and underwriters
  • Binding window confirmed for insurance
  • Declared routing documented
  • Time in zone estimate by waypoint
  • Convoy or escort rules checked
  • ISPS and notifications aligned with ports
Clause highlights
  • Allocation of war-risk and H&M adders
  • Deviation rights and routing change approvals
  • Change of voyage costs and timing
  • Reimbursement triggers and proof requirements
Case study cards
AG to China via Suez
Distance: - nm
Days: -
Fuel: Suez plan
Adders: war risk, canal
Net TCE: -
Chosen route: Suez
AG to China via Cape
Distance: - nm
Days: -
Fuel: Cape plan
Adders: none
Net TCE: -
Chosen route: Cape
WAF to Asia via Cape
Distance: long haul profile
Days: extended cycle
Fuel: Cape plan
Adders: none
Net TCE: route dependent
Chosen route: Cape
Signal panel
Premium band today
Base
Action: pair with AG list and calculator
Red Sea advisory level
Standard
Action: confirm binding window
Suez transit status
Flowing
Action: compare time saved
Cape refueling hubs
Normal
Action: align lift plan
AG position list density
Tight
Action: hold and widen laycans
Briefing sheet
Big takeaway: choose the route that maximizes net dollars per day after premiums, tolls, fuel, security, and schedule risk.
Metric Suez with war risk Cape without war risk
Dollars per day - -
Sensitivity to premium ±25 bps - Low
Mini glossary
Time in zone hours spent inside the listed risk area.
H&M hull and machinery insurance coverage and adders.
Additional premium extra charge tied to risk and routing.
Binding window period during which the quote remains valid.
Exclusions conditions that void or limit coverage.

You can use this package as your morning decision check. Scan the signal panel, run the calculator with live quotes, and look at the waterfall to see exactly which cost flips the route. If premiums are calm and time is tight, Suez usually wins. If premiums are elevated or volatile and your schedule can flex, Cape often protects margin. Fix, route, and speed with intent so today’s volatility turns into higher dollars per day.

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By the ShipUniverse Editorial Team — About Us | Contact


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