The ongoing conflict between Israel and Iran has significantly increased insurance costs for ships navigating the Red Sea and Persian Gulf, reflecting growing concerns over maritime security in the region.
Marine insurers are now charging 0.2% of a ship’s value for voyages into the Gulf, up from 0.125% before Israel’s surprise attack on Iran last week, CNBC reports based on data from insurance broker Marsh McLennan.
In addition, war risk insurance rates for the Red Sea have risen and coverage for ports in Israel has surged more than threefold, reaching 0.7%. Marsh data, also noted that the validity period for insurance quotes has been halved, dropping from 48 hours to just 24, as underwriters move quickly to reassess risks in an increasingly volatile environment.
Furthermore, Xclusiv Shipbrokers have also reported that war-risk insurance costs have surged sharply. For example, insuring a supertanker (VLCC) from Ras Tanura to Ningbo rose from $0.25 to as much as $0.80 per barrel between Thursday and Friday.
Insurance policies are also now including 96-hour cancellation clauses as a standard precaution.
This surge in insurance premiums underscores the deteriorating security situation in the Middle East, as Israel and Iran continue to launch retaliatory air strikes. The escalation has fueled fears of a broader regional conflict, with global attention now turning to the possibility of U.S. involvement.
