The cost of insurance for ships passing through the Red Sea has nearly doubled after Yemen’s Houthis attacked an oil tanker that appeared to be leaking, with environmental fears growing for the trade route, according to reports Reuters.
Iran-aligned Houthi militants first launched drone and missile strikes on the waterway in November, in what they say is solidarity with Palestinians in Gaza. In more than 70 strikes, they have sunk two ships, seized others and killed at least three sailors.
In the latest escalation, the Greek-flagged tanker Sounion was attacked by several shells last week and appears to be leaking oil, the Pentagon said Tuesday.
A third party tried to send two tugboats to help salvage the Sounion, but the Houthis threatened to attack them, the Pentagon added.
Insurance industry sources, speaking on condition of anonymity, told Reuters on Wednesday that additional war risk premiums, paid when ships sail in the Red Sea, were being priced at up to 0.75 percent of the ship, up from 0.4 percent before the attack, although they were 1 percent higher in February, according to industry assessments of risk levels.
The latest spike in costs could run into hundreds of thousands of dollars for a voyage through the region, although rates for Chinese-owned vessels have fallen by up to 50 percent since February due to the reduced risk of being targeted, the sources added.
An industry source said some underwriters are not currently providing coverage across the region because of the potential risk of the tanker sinking.