Image: Singapore Maritime Law Enforcement Agency What's new: GNSS interference becoming a concern of insurance professionals, and hopefully the industry

It wasn’t missiles that closed the straits of Hormuz. It was insurance companies. At the outbreak of hostilities international insurance companies canceled war-risk coverage.

The JWC has redrawn the Red Sea risk map to Jizan as Lloyd's pulls cover from Saudi tankers, trapping the kingdom's oil exports between a blocked Hormuz and a Houthi-sealed Bab el-Mandeb. #RedSea #Houthis #SaudiAramco #LloydsOfLondon #BabElMandeb #OilTankers #MaritimeInsurance

The accident is expected to result in substantial insurance claims, with estimates ranging from $100 million to $300 million.

The U.S. Development Finance Corporation (DFC) has announced a $20 billion plan to re-insure maritime transit through the Strait of Hormuz. This initiative aims to prevent a prolonged disruption of oil and hydrocarbon shipments after insurers began canceling or renegotiating policies that cover 'war risks' following the start of the Israeli-American offensive in Iran. The suspension of insurance, combined with Tehran's threats to attack vessels attempting to pass through the strategic waterway, has effectively paralyzed maritime transport in the region, leaving around 500 oil and gas tankers stranded and severely affecting global trade in hydrocarbons, fertilizers, and aluminum. The disruption has caused a sharp rise in fuel and oil prices worldwide, including the United States, where political tensions are mounting ahead of the midterm elections. The DFC and U.S. Treasury Secretary Scott Bessent indicated that the program would encourage major insurers to resume coverage by taking on war-related risks. Military escorts for ships will also be provided. However, experts like JP Morgan warn that the funds may not be sufficient to cover all potential risks. The DFC clarified that the insurance will cover only critical losses such as hulls, machinery, and cargo, excluding crew and oil spill risks. The program will also be time-limited and apply only to ships operating in the conflict zone, with specific eligibility criteria established for participation.

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