How the Iran War Has Snarled Global Oil & Gas Shipping

Maritime attorney Sean Pribyl was quoted in a Law360 article about the legal and insurance fallouts from the effective closure of the Strait of Hormuz as a result of the Iran war. Mr. Pribyl described how the disruption is forcing oil and liquiefied natural gas (LNG) shippers, charterers and vessel owners to closely examine contract language around force majeure, delayed delivery and termination rights. He also noted that war risk insurance for vessels crossing the strait is highly specialized and prohibitively expensive because premiums are tied to the dangers of operating in a major international choke point. Drawing a parallel to the COVID-19 pandemic, Mr. Pribyl said large-scale shipping disputes can last for years and emphasized that companies need to quickly assess their options.

"What we learned from the pandemic in particular was these disputes...have the potential of carrying on for a very long time," he said. "...Time is of the essence. You have to understand where your defenses are, what your exposure is."

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