Escalating war risk premiums and insurance restrictions threaten Gulf shipping more than physical threats, warns Lloyd's List.
Rising war risk premiums and tightening insurance cover may now pose a greater challenge to Gulf shipping than missiles or blockades, reports London's Lloyd's List.
War risk premiums for Strait of Hormuz transits have surged into double digits as US-Iran hostilities and Houthi attacks escalate. Brokers say underwriters are scrutinizing Saudi-linked voyages, with some avoiding cargoes tied to Saudi ports and interests.
Lloyd's market underwriters are reportedly considering restricting war risk cover for Saudi-related business in the Red Sea. If such measures spread, insurance availability could become as decisive as security threats in shaping vessel movements.
The deteriorating environment spans both Hormuz and Bab el Mandeb. Neither chokepoint is formally closed, but military activity, political uncertainty, and rising premiums have reduced traffic. Iran has compelled many ships to follow its designated transit routes, while Houthi strikes have expanded from Israel-linked shipping to Saudi energy exports.
The conflict is increasingly defined by commercial confidence rather than physical closure. Operators are choosing to avoid routes rather than being forced to. Lloyd's List noted that markets can adapt to disruption, but uncertainty is harder to manage.
With instability also affecting the Black Sea, the cumulative impact on energy flows and supply chains is mounting. The key question for shipping, Lloyd's List concluded, may no longer be where the next attack occurs, but whether insurers remain willing to cover the voyage.
