Black Sea War Insurance Hits Record High

The Black Sea is a vital corridor for global trade in grain, oil, and petroleum products and attacks on tankers in recent days have raised alarm over the growing maritime dimension of the war. On Wednesday, Turkish Foreign Minister Hakan Fidan warned that these incidents posed a broader threat to regional safety.

Vessels heading to Russian or Ukrainian ports, particularly near the Sea of Azov, must secure additional war-risk insurance, typically issued in seven-day increments. Until recently, underwriters reviewed war-risk terms every 48 hours, but due to recent developments, they are now adjusting coverage daily.

On Tuesday, Russian President Vladimir Putin threatened to cut Ukraine’s access to the sea in retaliation for recent attacks on Russia-linked tankers, and warned that ships from countries aiding Ukraine could become targets. This has narrowed the premium gap between Russian and Ukrainian ports—previously, coverage for Russian ports commanded higher rates.

War-risk premiums have risen to between 0.6% and 1% of a vessel’s value, compared to 0.4–0.6% last week. A 1% rate would mark the highest since late 2023, though still below the 2% peak for Red Sea routes during intense Yemeni Ansarullah military operations in 2024. Even small rate increases can mean tens of thousands of dollars in extra daily insurance costs.

Marcus Baker, global marine leader at Marsh, said additional premiums may rise further if Russia's rhetoric translates into direct attacks on shipping or if vessels closer to Turkish waters are targeted.

In a bid to maintain uninterrupted energy flows, Turkey has called on all parties to avoid targeting energy infrastructure.

Ukraine recently claimed responsibility for attacking two empty tankers en route to a Russian port but denied involvement in a drone strike on a Russian-flagged tanker loaded with sunflower oil earlier this week.

British maritime security firm Ambrey reported a significant increase in threat levels for tankers calling at both Russian and Ukrainian ports, urging shipping firms to conduct hull inspections for limpet mines following visits to Russian terminals.