Red shipping insurance costs increase amid Houthi attacks
Date
8/29/2024 8:44:02 AM
(MENAFN) The cost of insuring ships navigating the Red Sea has nearly doubled following recent reports of an oil spill from a Greek-flagged tanker attacked by Yemen's Houthi group. The Houthi movement, which has aligned itself with Iran and has been conducting attacks in the Red Sea since November, has used drones and missiles in their operations. Their actions, claimed to be in solidarity with Palestinians in Gaza, have led to the sinking of two vessels, the capture of one, and the deaths of at least three sailors.
The most recent assault involved the oil tanker Sunion, which was targeted with multiple missiles, resulting in an oil leak as confirmed by the Pentagon. Efforts to assist the stricken vessel with two tugboats were thwarted when the Houthis threatened to attack these rescue efforts. The impact of these ongoing hostilities has been significant on the insurance industry. The cost to insure ships passing through the Red Sea has surged from 0.4 percent to 0.75 percent of the vessel’s value. Although this rate had previously peaked at 1 percent in February, the current increase still represents a substantial cost hike for shipping companies. Despite these heightened risks, insurance costs for Chinese-owned ships have notably decreased by up to 50 percent since February, reflecting their lower risk profile in the region.
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