Saudi oil export strategy hits new hurdle as Red Sea insurance costs soar

Insurance costs for tankers carrying Saudi oil out of the Red Sea have surged sharply, creating a new hurdle for the kingdom’s export plan, Reuters reported. Industry sources said the war-risk premium for Saudi-linked tankers calling at Yanbu has risen to about 3% of a vessel’s value, up from less than 1% in early July. The increase followed London’s marine insurance market designating the area as high-risk after Houthi attacks near the Bab el-Mandeb strait. Saudi Arabia diverted roughly 4 million barrels per day via its East-West pipeline after Iran constrained Gulf exports in March, then shut the pipeline on Sept. 11 after drone attacks it attributed to Iraq.