All articles tagged with #war risk insurance
Tanker traffic through the Strait of Hormuz has plunged as Middle East tensions flare, with about a 90% drop from the prior week as ships skirt danger; insurers are hiking war-risk premiums, major carriers have paused bookings, and oil and gas prices are climbing, threatening inflation and potentially altering Fed rate expectations.
Mutual marine insurers have cancelled war-risk coverage for vessels in the Gulf and Iranian waters as the Iran conflict escalates, prompting rerouting around Africa and higher costs. War-risk premiums could rise around 50%–100% (or more), pushing freight rates higher as routes tighten; CMA CGM and others have added surcharges, and several carriers are diverting Red Sea sailings, though Hormuz’s small share of global container traffic limits immediate systemic impacts.
Ongoing missile and drone attacks by Houthi militants in the Red Sea have led to soaring shipping costs, as vessels using the Suez Canal face higher insurance premiums or opt for the longer route around Africa. The attacks have disrupted global trade, causing shutdowns at European auto plants and raising concerns about consumer price increases. The Drewry World Container Index has more than doubled, partly due to a shortage of shipping containers caused by longer travel times. War risk insurance is now necessary for ships in the region, leading to increased costs for shipping companies.