Latest tanker incident will prompt insurers to raise war risk rates for vessels in the Middle East: DWF
The Iranian oil tanker 'Sinopa' being damaged, by what Iranian media said was a rocket attack, will drive war risk insurance rates for vessels in the Middle East.
That’s the view of DWF, a global legal business. DWF notes that the explosion caused an oil spill into the Red Sea, but this was brought under control, according to an Iranian news agency.
However, Jonathan Moss, Head of Marine & Trade at DWF, exploring the cost to the insurance market, said: “Marine insurance, cargo and hull & machinery cover incorporating war risks, is uncontrollably linked with geopolitical conflict. This latest incident will drive insurers to raise further war risk insurance rates for vessels operating in the region, over and above the 10-fold increase to rates since the attacks on tankers in May.
He added: “Shipping companies operating in the region will be forced to absorb these added costs with affordable insurance in this high risk zone becoming harder to find. This could lead to cost-cutting measures in other areas of maritime trade.”
He said that whether it was an act of terrorism or indeed a breach of international sanctions is of crucial significance in determining whether and how cover might respond.
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