Maritime insurers cancel war risk cover in Gulf as Iran conflict disrupts shipping

"Several leading marine insurers, including Norway's Gard and Skuld, the UK's North Standard and the London P&I Club, and the New York-based American Club, said they were cancelling war risk cover for ships operating in the region. The insurers said war risk cover which typically covers shipowners for costs and damages resulting from war, terrorism and piracy would be cancelled in Iranian waters, as well as the Gulf and adjacent waters, with effect from 5 March."

"The vital shipping route, through which about 20% of the world's oil supplies and 20% of seaborne gas tankers pass, is effectively closed after the US and Israel began intense airstrikes on Iran on Saturday. At least 150 vessels including oil and liquefied natural gas tankers have dropped anchor in the strait of Hormuz and surrounding waters."

"Freightos terminal container rates for Shanghai to Jebel Ali in Dubai, the largest port in the Middle East, rose from $1,800 for a 40-foot container on Saturday to about $3,700 on Monday, according to the online shipping marketplace. The Containerized Freight Index tracked by the website Trading Economics rose by 6.5% on Monday."

Following intense US and Israeli airstrikes on Iran, leading maritime insurers including Gard, Skuld, North Standard, London P&I Club, and American Club cancelled war risk coverage for vessels operating in Iranian waters, the Gulf, and adjacent waters effective March 5. Over 150 vessels including oil and LNG tankers anchored in the Strait of Hormuz as the vital shipping route, through which 20% of global oil and seaborne gas passes, effectively closed. Shipping costs surged dramatically, with container rates from Shanghai to Dubai rising from $1,800 to $3,700 for 40-foot containers within two days. The Containerized Freight Index increased 6.5% on Monday. While container volumes through the strait represent only 2-3% of global traffic, broader regional disruptions including Red Sea complications pose wider market concerns.

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