Red Sea Shipping Insurance Premiums Rise
Reuters has reported that insurance premiums for shipping goods through the Red Sea have risen significantly following the announcement by the Yemeni Houthis of an immediate blockade of navigation in the Bab el-Mandeb Strait. This escalation increases the risk of conflict and impacts global energy supplies and trade. War risk premiums have increased to approximately 0.75% of the vessel's value, compared to 0.3% before the announcement. Maritime security companies assess that Saudi ships and others heading to the Kingdom are considered at high risk due to potential attacks. If the strait were fully closed, Saudi oil exports to Asia passing through it could be halted, reducing global oil supplies by up to 7%. The Houthis have continued targeting ships since November 2023 as part of their support for the Palestinians, with an increase in piracy and hostage-taking incidents in the Gulf of Aden in recent months, heightening concerns over maritime safety in the region.
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