The Houthis have launched several attacks on ships in the Red Sea since November. A Houthi official said on Monday that they would expand their targets to include American ships.
The London insurance market listed the southern Red Sea among high-risk areas, even before the recent Houthi attacks, and ships must notify their insurance companies when sailing through these areas and pay an additional premium, which until earlier this month was usually for a coverage period of seven years. days.
Sources in the insurance sector said that insurance premiums against war risks rose to about one percent of the ship’s value, from about 0.7 percent last week, with various discounts applied by insurance companies. She added that prices are expected to rise.
This translates into hundreds of thousands of dollars in additional costs for a seven-day trip.
War risk quote times are now much shorter, “with 24 hours becoming the norm,” said Monroe Anderson, chief operating officer of marine war risk and insurance company Vessel Protect, which is part of Bain Insurance.
He told Reuters, “Prices are increasing, which reflects the large and ambiguous exposure to risks in the Red Sea.”
He added, “Since the naval and air strikes in Yemen, it is now widely believed that in addition to ships linked to Israel, there is
an increasing threat to ships linked to Britain and the United States, including their flags, as well as those linked to Australia, the Netherlands, Bahrain and Canada,” noting that The US-led maritime coalition that attempts to protect commercial shipping traffic.
The US-based Eagle Bulk Shipping Company said on Monday that one of its ships was hit by an “unidentified projectile” while sailing 160 kilometers off the Gulf of Aden.
A source in the insurance sector said, “Houthi attacks include all ships, and their clarity standards are declining… We now advise ships flying the flags of the United States and Britain not to pass through the Red Sea.”
In recent days, commercial ships have suspended their trips through the Red Sea, with more ships making the longer journey via the Cape of Good Hope route.
“As tensions escalate in the Red Sea, the cost of transporting goods globally will increase and will inevitably be passed on to the end consumer,” said Nicole Hudson, Director of Supply Chain Platform E2Open.
Shipping sources said that higher insurance rates and higher Suez Canal crossing fees mean that taking the longer route has become less expensive, which may also mean less certainty about delivery dates.
“Shipowners and charterers may find it more cost-effective to change course around Africa than incurring the combined costs of Suez Canal transit fees and insurance premiums,” Clarksons Securities said in a note this week.
“If the US-led coalition fails to thwart further attacks and ensure freedom of navigation in the region, we expect war insurance coverage to become unavailable, forcing most traffic to use the route,” Morningstar rating service DBRS said. much longer around the Cape of Good Hope.”
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