Tensions in the Middle East remain high with direct consequences for shipping in the region. Over the past months, attacks have been carried out on targets in Iran, Bahrain, Israel, Kuwait, Qatar and the United Arab Emirates.
We summarize the most important developments for shipping as follows:
- Iran has announced a general prohibition on navigation in the Strait of Hormuz and only allows limited traffic, often for friendly nations or against payment, after which vessels are permitted to pass under IRGC escort.
- Several tankers and cargo vessels have been turned back. Ships that have proceeded in violation of the ban have regularly been attacked. In recent weeks, more than twenty attacks on merchant vessels have been reported, including heavy attacks on the “Mayuree Naree” near Qeshm Island. The vessel recently drifted and ran aground on 26-27 March after a severe fire in the engine room. Three crew members are still missing.
- Shipowners report ongoing GPS spoofing and jamming in the Strait of Hormuz and the Persian Gulf, which creates serious navigation risks.
- The situation has led to a sharp rise in war-risk premiums, which in some cases have risen to 0.5-5% of the vessel’s value (with outliers up to 10%). In addition, many Fixed-premium insurers and P&I Clubs have withdrawn or severely restricted cover for the area, meaning shipowners who are not insured on a mutual basis are facing additional insurance costs or alternative cover at very high premiums.
- The number of transits has dropped by 90-95%; many vessels are at anchor outside the zone.
- The ongoing situation is causing a significant worldwide increase in bunker prices and a growing risk of shortages – a situation that was already uncertain due to developments surrounding the conflict in Ukraine.
In the past week there appears to have been a decrease in shipping-related incidents and no major new attacks have been reported. However, the situation remains precarious and our advice continues to be to avoid the region where possible.
NNPC Marine Insurance is continuously monitoring developments via UKMTO, US Centcom, diplomatic sources and our correspondents. For advice or further clarification we invite you to contact us via claims@nnpc-marine.com.
