War risk premiums for Saudi linked tankers loading at Yanbu have risen to about 3 percent of a vessel’s value. Business Insurance reported the figure on October 1, citing Reuters. The rate stood below 1 percent in early July. For ports farther south toward Jizan, premiums rose from around 1 percent in July to as high as 7 percent.
The increase followed a decision by the London marine insurance market. The market classified those waters as high risk after Houthi attacks near the Bab el-Mandeb strait.
Reuters reported on September 24 that higher insurance costs threaten Saudi oil export plans through the Red Sea.
The Armed Conflict Location and Event Data Project, known as ACLED, gave background in a risk assessment published on October 1. ACLED said Houthi territorial gains around Bab el-Mandeb raised risks for Red Sea shipping, energy sites and oil markets. ACLED said renewed confrontation with Saudi Arabia added to the risk. Houthi forces advanced about 150 kilometres along the Red Sea coast in one week in September. They captured Mocha and reached Bab el-Mandeb, according to ACLED. The move gives them a stronger position to watch the strait and launch operations.
ACLED said the Houthis now focus their maritime attacks on vessels they treat as Saudi linked. They say other ships can pass if governments stay out of the fight. Between the July blockade announcement and late August, ACLED recorded attacks on ten commercial ships. Most were tankers. At least six were hit. ACLED reported no corroborated maritime hits after August 24. It still expects higher insurance, security and rerouting costs. It also expects continued risk for Saudi export routes in the Red Sea and around the Strait of Hormuz.
ACLED noted that Saudi Arabia relies more on its western export sites as disruption around Hormuz pushes crude toward Red Sea outlets such as Yanbu. More Saudi linked tankers now travel through the waters where premiums rose.
Most of Ethiopia’s seaborne imports and exports move through Djibouti. Higher war risk premiums can raise freight costs for cargo that passes through that port.
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