Kathmandu. In recent months, the transit cost of oil tankers crossing the Strait of Hormuz has risen sharply. Some operators are facing bills of $10 million to $20 million for a single trip. <\/p>\n
This increase is mainly due to higher cargo insurance and war risk premiums. That was raised by underwriters after the conflict with Iran escalated earlier this year. <\/p>\n
According to Paul Broadus, director of Emirates National Oil Company, these increased costs have become commonplace. Cargo cover alone can account for 5 percent or 6 percent of the cost of transportation. Meanwhile, war risk insurance rates have reached 10 percent of the ship’s insured hull price. <\/p>\n
According to insurance brokers and market observers, normal war risk charges when transiting through Hormuz are now about 1.5 percent or more of the hull price. This was about 0.1 percent before the crisis. <\/p>\n
At about $150 million, the extra premium for a single route on many large crude oil carriers can easily exceed $2 million, and the entire transit package, including cargo, has brought the total cost to $10 million to $20 million for some tankers. <\/p>\n
The rates are not stable. They had come down after the news of the ceasefire agreement in June. In some cases, the prices had fallen from 5 per cent to 2 per cent. However, they have risen again as tensions have escalated. <\/p>\n
According to market experts, underwriters still set prices based on the risk of disruption, and many shipowners have preferred to avoid the waterway as much as possible. Due to coverage pressures, Saudi authorities have recently taken steps to create a national maritime insurance bridge. <\/p>\n
The rising insurance burden directly adds to the cost of shipping crude oil. Industry experts estimate that war risk fees alone could now add many dollars to the cost of every barrel of oil shipped from the Gulf. \u2013 Agency<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. In recent months, the transit cost of oil tankers crossing the Strait of Hormuz has risen sharply. Some operators are facing bills of $10 million to $20 million for a single trip. This increase is mainly due to higher cargo insurance and war risk premiums. That was raised by underwriters after the conflict with […]<\/p>\n","protected":false},"author":16,"featured_media":309512,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45044,45159],"tags":[],"class_list":["post-315620","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-international-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/315620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=315620"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/315620\/revisions"}],"predecessor-version":[{"id":315621,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/315620\/revisions\/315621"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/309512"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=315620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=315620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=315620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}