Kathmandu. War risk insurance premiums for ships passing through the southern Red Sea have more than doubled since Yemen’s Iran-backed Houthi rebels attacked a tanker on July 23.
Before this, the insurance rate of the ships passing through the Red Sea route has increased by more than 1 percent. It was about 0.75 percent on July 21 and 0.3 percent the previous week. Rates for some Saudi-related ships and vessels calling in southern Saudi ports have increased by up to 3 percent.
Even such a small increase can add millions of dollars to the cost of a typical 7-day trip. The price hike came after the Houthis claimed to have carried out missile and drone attacks on two Saudi oil tankers, the Ancelia and the Laila. The group said it was in response to alleged violations of the maritime blockade imposed on Saudi Arabia.
Maritime security sources confirmed the attack in Ancelia, off the coast of Jizan, near the Saudi-Yemeni border. U.S. President Donald Trump said two Saudi tankers had been attacked, but Reuters could not immediately confirm the second incident.
On July 20, the Houthis announced a naval blockade against the Saudis. This has increased the risk of commercial traffic near the Bab al-Mandeb waterway.
The Saudi-led coalition took steps to secure shipments in the region the next day. Ships operating from northern Saudi Red Sea ports such as Jeddah and Yanbu have a premium of about 0.1. Because they are far from the current risk zone.
This new move continues the pattern of rapid market response to the growth of the sector. Rates had already risen earlier in the week after the blockade was announced. Shipping operators and underwriters are closely monitoring the situation as the southern Red Sea continues to be an essential route for global trade. –Agency
