- Tanker Explosions Spur Insurance Hikes and Sanctions Pressure.
- Vilamoura Attack Highlights Risks Facing Russia-Linked Vessels.
- Germany Seizes Tanker as EU Tightens Sanctions Enforcement.
There’s been a surge of covert attacks on oil tankers, coupled with tougher sanctions on Russia’s shadow fleet, which are throwing a wrench into global maritime insurance. Shipowners and underwriters are now grappling with increasing geopolitical and financial risks, reports Insurance Business.
Tanker Explosions Tied to Russian Ports
In the past few months, five tankers have suffered damage from suspected limpet mine attacks, a signature move in asymmetric maritime warfare. The most recent incident flooded the engine room of the Vilamoura off the coast of Libya, while four similar attacks took place earlier this year in the Mediterranean and Baltic seas.
All the affected vessels had recently docked at Russian ports. Ukrainian intelligence has identified Vilamoura as part of Russia’s shadow fleet, suggesting potential retaliation. However, Kyiv has neither confirmed nor denied its involvement.
Western Enforcement Intensifies
This crackdown is part of a larger effort by Western nations to enforce sanctions and uphold environmental protections. The EU has placed over 340 vessels on its sanctions list. Germany’s Transport Minister Patrick Schnieder called for “increased vigilance” and affirmed plans for deeper cross-border cooperation.
Germany recently took action by seizing a Panama-flagged tanker earlier this year, raising eyebrows with its strong stance on enforcing sanctions.
Insurance Markets Under Pressure
Insurers are currently navigating a tough landscape, facing both stricter regulations and increasing war risks. In the Middle East, several insurance providers have opted to withdraw war risk coverage for vessels associated with the US, UK, or Israel. “The ability to obtain coverage remains, but pricing and terms are shifting by the hour,” said Marcus Baker, Marsh.
Premiums have skyrocketed more than threefold since spring, with some now exceeding 0.5% of the hull’s value. Additionally, the notification periods for coverage have been slashed from 48 hours down to just 24, creating a sense of urgency for both brokers and owners.
Global Tensions Deepen Industry Uncertainty
In areas like the Strait of Hormuz, where a staggering 20% of the world’s oil flows, tensions are still running high. The fragile ceasefire between Israel and Iran hasn’t done much to ease the situation. Private security firms warn of a “realistic possibility” of renewed hostilities.
Insurance at a Crossroads
The marine insurance industry is really feeling the pressure right now, caught in a whirlwind of sabotage, sanctions, and dwindling coverage options. Governments are pushing for greater transparency, but insurers seem to be pulling back and reassessing their strategies.
If a significant uninsured loss occurs, it could spell disaster for shipowners, particularly if it involves environmental harm. At the same time, reinsurers are becoming increasingly cautious about their exposure to this sector. “There’s no clear direction right now,” said Lloyd’s List editor David Osler. “The mood in the market is best described as anxious and fluid.” In today’s maritime landscape, insurance has become a high-stakes game of compliance and risk, shaped as much by geopolitics as by trade.
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Source: Insurance Business
