Oil Tanker Insurance Triples Amidst Global Shipping Tensions

Insurance costs for oil tankers tied to Saudi Arabia have surged in recent weeks as shipping risks in the Red Sea rise. Reuters reported that war risk premiums for Saudi-linked vessels calling at Yanbu are now around 3% of a ship’s value, up from less than 1% in early July. The increase follows London’s marine insurance market labeling the water as high-risk after Houthi attacks near the Bab el-Mandeb. Saudi Arabia diverted about 4 million barrels per day through its East-West pipeline to the Red Sea, then shut the pipeline on September 11 after drone attacks it attributed to Iraq-based militants. Loading activity at Yanbu has not fully resumed. Industry sources also said premiums for ports south of Yanbu can reach about 7%, while non-Saudi-connected tankers usually face far lower rates.