Singapore: Oil tanker owners face spiralling insurance costs to load cargoes from the world’s largest crude-export region after the latest round of attacks on vessels.
War risk premiums that owners pay each time they go to the Gulf have now surged to at least $185,000 for supertankers, according to people with knowledge of the market. They rose to $50,000 after the attacks a month ago, report agencies.Both owners and the companies that charter their ships paused bookings in the immediate aftermath of attacks on Thursday as they re-evaluated risks to shipping barrels from the Middle East in the wake of attacks on two more tankers just a month after similar incidents. Insurance costs from the Arabian Gulf are soaring.
The US pointed the finger at Iran for the attacks just outside the Strait of Hormuz, a vital corridor for crude oil exports. The Arabian Gulf country immediately denied being responsible. Regardless, six tankers, hauling a variety of petroleum cargoes, have now been targeted in the space of just 32 days — the kind of threat to merchant shipping that hasn’t been seen in the region for decades.
“We need to remember that some 30 per cent of the world’s crude oil passes through the Straits,” said Paolo D’Amico, chairman of Intertanko, the biggest trade group for tanker owners. “If the waters are becoming unsafe, the supply to the entire Western world could be at risk.”
The Joint War Committee, a group that advises insurers, designated the entire Arabian Gulf and waters just outside it a so-called Listed Area after the incidents a month ago. The classification gives underwriters room to charge more. As of Thursday, owners were reluctant to send vessels to the region while there was also a dearth of cargoes, according to traders and shipbrokers involved in that market, who spoke on condition of anonymity.
DNK, the mutual insurer that covered one of the ships damaged Thursday, will increase its rates for war insurance, according to a person familiar with the matter.