New War Risk Insurance Premiums Expected for Middle East Gulf by March 7

Following an escalation of tensions in the Middle East Gulf, insurance underwriters are expected to issue new war risk premiums by March 7, a shipping management firm informed OPIS on Thursday.

Marine insurance companies were heard to have cancelled war risk coverage for vessels entering the Middle East Gulf and Gulf of Oman. Without marine insurance, commercial shipping traffic is legally unable to sail in the region, leading to a significant number of vessels anchored.

When a notice of cancellation is issued, there is normally around 72 hours before a new premium will be issued to the owner to either accept or cancel, a shipping management company added. Clarksons Research noted approximately 3,200 vessels were caught up in the region as of Monday evening, equating to around 4% of global tonnage.

The International Transport Workers’ Federation (ITF) and the Joint Negotiating Group (JNG) issued a joint release on Monday designating the Strait of Hormuz and surrounding areas as a High Risk Area, following the escalation of military action.

The designation of a High Risk Area activates enhanced protection measures for those seafarers belonging to the International Bargaining Forum working in or near the affected waters. The International Maritime Organization (IMO) has also urged maximum caution and advised vessels to avoid the area where possible.

There are around 20,000 seafarers stranded because of the conflict near the Straits of Hormuz, IMO secretary general Arsenio Domingues told the BBC on Thursday. He added that around 15,000 passengers on cruise ships are also affected.

Reporting by Jamie Aldridge, jaldridge@opisnet.com