Black Sea Vessel Insurance Triples Amid Ukraine’s Strikes on Russia’s Shadow Fleet
The cost of insuring vessels operating in the Black Sea has tripled over the past month, with prices expected to continue rising amid Ukraine‘s intensified strikes on Russian port infrastructure and tankers belonging to the shadow fleet. According to insurance brokers, the price of war-risk insurance has increased from 0.25-0.3% of a vessel’s value in early November to 0.5-0.75% in early December – effectively a 250% rise.
Marcus Baker, head of marine at the brokerage firm Marsh, noted that the steepest increases have occurred in areas of the Black Sea adjacent to Russia, as well as near Ukraine, Georgia, and Türkiye. “Russia will escalate things into Ukraine, so we will probably see further increases in rates in the region,” Baker said.
Escalating Tensions Drive Insurance Premiums Higher
The surge in costs has been driven by Ukrainian strikes on infrastructure, including the port of Novorossiysk, as well as ongoing attacks on oil tankers Moscow uses to circumvent Western sanctions. For example, Ukrainian drones struck two sanctioned tankers – Kairos and Virat – off the coast of Türkiye on 28 November. There were also reports of an attack on the vessel Midvolga-2, though Ukraine denied involvement.
The market was further unsettled by an explosion on a Turkish tanker off the coast of Senegal. Following the incident, the ship’s owner, Istanbul-based Besiktas Shipping, announced a halt to all Russia-related voyages. Industry sources say insurance premiums have risen most sharply for tankers and bulk carriers linked to Russia.
Maritime Security Experts Warn of Wider Consequences
Maritime security experts argue that such incidents are causing shipowners to fear that even vessels engaged in legitimate trade may become targets. Analysts worry that Ukraine‘s successful attacks could prompt Russia to retaliate with strikes on Ukrainian grain and ammonia exports.
Kremlin leader Vladimir Putin has said that Russia will increase strikes on Ukrainian ports and vessels calling at them in response to Ukrainian drone attacks on Russian tankers in the Black Sea. Andrii Klymenko, head of the monitoring group at the Institute for Black Sea Strategic Studies, believes Russia deliberately targeted an LPG carrier in the port of Izmail to frighten shipowners transporting cargo to Ukrainian ports.
Background: Escalating Tensions and Rising Insurance Costs
The situation is likely to continue escalating, with both sides trading blows. The insurance market will likely remain volatile as long as tensions persist. As the conflict intensifies, it remains to be seen how the global shipping industry will adapt to these new risks and challenges.
Original Article: Black Sea vessel insurance triples after Ukrainian strikes on Russia’s shadow fleet — Ukrainska Pravda