Growing tensions between Iran and Israel have started to heavily impact world maritime trade, with major shipping lanes under increased security threats.
War risk premiums on ships transiting the Arabian Sea and Persian Gulf have escalated, triggering steep cost increases and delays in global oil and cargo shipments.
As reported by the Athens-based sources in international shipping, war risk premiums were charged by insurance firms on vessels which sailed through the Red Sea following Yemeni Houthi rebel attacks on ships destined for Israel.
Because of the constant Iran-Israel conflict, more war risk premiums have now been imposed on all merchant vessels sailing across the Arabian Sea and the Persian Gulf, raising an additional 2.4 to 2.7 percent.
These additional premiums are having significant impacts on shipping, which is resulting in a 10-15% increase in shipping costs for shipping companies.
This scenario has the potential to hinder trade business and raise costs of production. It is approximated that every cargo vessel or tanker vessel must pay now a war risk premium of about $500,000 to $600,000.
The cost of insurance is calculated depending on the weight of the vessel and value of its cargo, thus leading to an observable rise in shipping costs.
Earlier, between 40-50 oil tankers used to cross the Strait of Hormuz on a daily basis, but now the number has reduced to 20-25, impacting oil shipment and international markets.
The Pakistani vessel, MT Shalimar, which is traveling from Saudi port city Dammam to deliver oil, is likely to traverse the Strait of Hormuz today.
The vessel is being escorted by a Pakistan Navy frigate to guarantee its security amidst possible threats.
