LMA says sanctions clarity is needed before Hormuz trade resumes as the US ends its Iran blockade and maritime threat level is reduced

The London Market Association (LMA) — the representative body for Lloyd's of London underwriters and insurers — has said that clarity on the unwinding of Iran sanctions is required before normal trade through the Strait of Hormuz can resume, even as the US has formally ended its Iran blockade and the maritime threat level in the region has been reduced. The LMA's position is commercially significant for global shipping, insurance, and trade finance markets. War risk and trade disruption insurance for vessels transiting the Strait was priced at elevated levels during the conflict period. Reduced threat levels would normally trigger a repricing of those premiums, but the LMA's intervention signals that the legal architecture of sanctions — not just the military posture — must be clarified before insurers are willing to cover Iranian-origin or Iranian-destined cargo and vessels on normal terms. Sanctions on Iran span multiple jurisdictions: US primary sanctions (which apply to US persons and entities globally), US secondary sanctions (which can apply to non-US entities dealing with Iran), UK sanctions implemented through the Office of Financial Sanctions Implementation (OFSI), and EU sanctions regimes. Each has its own licensing and General Licence framework, and inconsistencies between them create legal risk for shipowners, traders, and their financiers even where the underlying geopolitical conflict has been resolved. The unwinding of sanctions is a complex, multi-stage legal process that typically lags the diplomatic resolution by months or years, generating sustained demand for sanctions compliance counsel.