Web Desk: Recent tensions caused by the Iran-Israel conflict, international shipping severely affected.
According to the sources in international shipping based in Athens, insurance companies imposed war risk premiums on ships passing through the Red Sea after attacks by Yemeni Houthi rebels targeting vessels heading to Israel.
Due to the ongoing conflict between Iran and Israel, additional war risk premiums have now been applied to all commercial ships traversing the Arabian Sea and the Persian Gulf, with an increase of approximately 2.4 to 2.7 percent.
These extra premiums are causing considerable effects on the shipping industry, leading to a 10-15% rise in operational costs for shipping companies.
This situation threatens to restrict trade activities and increase production costs. It is estimated that each cargo ship or oil tanker now has to pay a war risk premium of roughly $500,000 to $600,000.
Insurance costs are determined based on the vessel's weight and the value of its cargo, which has resulted in a noticeable increase in shipping expenses.
Previously, around 40 to 50 oil tankers used to pass through the Strait of Hormuz daily, but now that number has dropped to 20-25, affecting oil transportation and global markets.
The Pakistani-flagged vessel, MT Shalimar, which is en route from the Saudi port of Dammam to deliver oil, is expected to pass through the Strait of Hormuz today.
The ship is being escorted by a Pakistan Navy frigate to ensure its safety amid potential threats.
