Skyrocketing War Risk Insurance Premiums Amid Middle East Tensions

War risk insurance premiums for shipments in the Middle East Gulf have escalated to 0.5% following U.S. airstrikes in Iran and rising risks in the Strait of Hormuz. This increase in premiums, based on ship value, is significantly inflating daily costs for shipping ventures in the area.

Insurance premiums for war risk coverage on shipments through the Middle East Gulf have seen a substantial increase. Rates have risen to 0.5% from the previous 0.2-0.3% range, spurred by heightened tensions after U.S. airstrikes on Iran's nuclear facilities and increased threats to the Strait of Hormuz.

This rise in insurance costs will burden shipping operations, adding tens of thousands of dollars daily based on the value of the vessels during a typical seven-day voyage. This elevated rate underscores the growing perceived risk in the region.

Industry sources noted that while underwriters generally tailor risk and rates, the 0.5% rate was already prevalent across the board on Monday, reflecting the immediate market reaction to the geopolitical developments as reported by Reuters and The Insurer.

(With inputs from agencies.)