Red Sea Shipping Costs Soar Amid Renewed Houthi Attacks

Insurance costs for shipping through the Red Sea have surged due to recent Houthi militant attacks, notably sinking two ships. This region, vital for oil and commodities, has seen decreased traffic and increased war risk premiums. Underwriters are hesitant to cover ships with Israeli connections.

The cost of insuring ships in the Red Sea has surged, with premiums more than doubling after deadly Houthi attacks sank two vessels, killing four sailors, according to industry sources. The Red Sea is crucial for global oil and commodities trade, but attacks by Houthi militants aligned with Iran have significantly hindered traffic since November 2023.

Insurance premiums for shipping have spiked to 0.7% of a ship's value due to the attacks, with some underwriters halting coverage for certain routes. Rates for a seven-day voyage have climbed to 1%, matching peak levels from 2024. These escalations impose substantial additional costs on shipments.

The recent assault on the Greek ship Eternity C highlights the heightened risks for vessels transiting the area. Houthi forces, claiming the attack, reportedly held crew members from the sunken ship. The conflict's implications are profound for ships with previous links to Israel, as underwriters are wary of providing coverage amidst the volatile situation.

(With inputs from agencies.)