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August 29, 2024
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Red Sea insurance rates nearly double after tanker attack

Red Sea insurance rates nearly double after tanker attack

In the latest escalation, the Greek-flagged oil tanker Sounion was hit by multiple projectiles last week and appears to be leaking oil, the Pentagon said Tuesday.

A third party had attempted to send two tugboats to help salvage the Sounion, but the Houthis threatened to attack them, the Pentagon added.

Insurance industry sources, speaking on condition of anonymity, said on Wednesday that additional war risk premiums, which are paid when ships navigate the Red Sea, were quoted as high as 0.75 percent of the ship, up from 0.4 percent before the attack, although they were higher at 1 percent in February, based on industry assessments of risk levels.

The latest cost increase can add up to hundreds of thousands of dollars for a voyage through the region, although rates for Chinese-owned vessels have been as much as 50% lower since February due to the lower risk of being targeted, the sources added.

An industry source said some insurers are not offering coverage in the region because of the potential risk of the tanker sinking.

An official with the European Union’s Aspides naval mission cited a letter sent on August 28 to maritime rescue coordination centres, which said the “feasibility of protective measures” such as towing the Sounion was being assessed.

“This situation poses a serious and imminent threat of regional contamination, with coastal states most at risk,” the letter said.



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