WASHINGTON: War risk premiums for transits through the Strait of Hormuz have skyrocketed from a pre-crisis baseline of 0.08% to 1% of hull value, marking a nearly 12-fold increase. This surge is squeezing the global energy trade, with ripple effects felt across economies. The International Group of P&I Clubs, which collectively covers around 90% of the world’s ocean-going fleet, has issued 72-hour cancellations of war risk extensions for Gulf operations, effective March 5. The cancellations follow the withdrawal of reinsurers’ support after the February 28 strikes, which sharply raised premiums across the sector.
The new war risk premiums have made maritime trade more expensive, with companies now paying up to $1.2 million for a single voyage — a sharp contrast to last month’s premium of $96,000.
For example, a very large crude carrier (VLCC) carrying $160 million worth of Saudi crude must now factor in these additional costs to transit through the Strait of Hormuz, a vital chokepoint for global oil trade.
