economy
Maritime insurers cancel war risk cover in Gulf as Iran conflict disrupts shipping
Strait of Hormuz is effectively closed and vessels rerouted, sending some freight costs surging
TL;DR
- Leading maritime insurers have cancelled war risk cover for ships operating in the Gulf.
- The Strait of Hormuz, a vital shipping route for oil and gas, is effectively closed due to intense airstrikes.
- At least 150 vessels have dropped anchor in the region, and some tankers have been damaged.
- Freight costs have surged, with container rates significantly increasing.
- Major shipping companies are rerouting vessels away from the Red Sea and the Gulf.
- Insurance rates are expected to increase by 50% to 100% or more.
- Some companies have imposed emergency conflict surcharges on cargo.
- The disruption is causing a significant reduction in shipping capacity.