Latest news with #MarcusBaker
See - Sada Elbalad
a day ago
- Business
- See - Sada Elbalad
Strait of Hormuz Vessel Insurance Rates Jump 60% over Rising Geopolitical Risks
Taarek Refaat Insurance premiums for vessels transiting the Strait of Hormuz have surged more than 60% in recent days, as rising geopolitical tensions between Iran and Israel cast a shadow over one of the world's most vital oil shipping lanes. According to a report by the Financial Times, hull and machinery insurance—which covers physical damage to ships—has jumped from 0.125% to around 0.2% of a vessel's value since the start of the conflict. For a ship valued at $100 million, this equates to a rise from $125,000 to $200,000 in insurance costs per passage, based on data from Marsh McLennan, the world's largest insurance brokerage. The Strait of Hormuz, a narrow maritime corridor between Iran and Oman, is a strategic chokepoint through which about a fifth of global oil supply flows. The increase in insurance premiums underscores mounting fears of disruption, despite no direct attacks on commercial vessels being reported so far in the Gulf. 'We haven't seen a missile fired at a ship in the Arabian Gulf yet, so this is a signal from the market of growing concern,' said Marcus Baker, global head of marine and cargo insurance at Marsh McLennan. 'Prices could rise further.' Concerns are being driven not only by the threat of missile strikes but also by electronic interference, Houthi rebel activity, and the potential for direct U.S. or Israeli military involvement in the region. On Monday, two oil tankers collided near the Strait, and one was found to be transmitting unusual location signals, fueling suspicions of GPS spoofing or jamming. Insurers are increasingly wary of the Houthis, a Yemeni militant group backed by Iran, possibly expanding their attacks to target U.S., U.K., and Israeli-flagged vessels more aggressively. While some insurance providers may consider withdrawing coverage, others are prepared to assume the risk, Baker noted. 'War itself, as an insurance product, tends to be… lose everything or make a fortune. Many insurers have made significant fortunes willing to take the risk.' Although cargo insurance—which covers goods like crude oil—has yet to rise as sharply, brokers expect those rates to climb soon as well, especially if shipping disruptions continue or the conflict escalates. In parallel, analysts at Nomura are warning that ongoing trade tensions, especially between the U.S. and Asian economies, will keep tariffs elevated, particularly in the context of U.S.-China rivalry, further complicating the global trade landscape. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream News Shell Unveils Cost-Cutting, LNG Growth Plan Technology 50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean News 3 Killed in Shooting Attack in Thailand
Yahoo
2 days ago
- Business
- Yahoo
War Premiums Explode: Oil Tankers Face 60% Surge to Cross World's Most Dangerous Waterway
Insurance costs are rising fast for oil tankers passing through the Strait of Hormuzone of the world's most critical energy chokepoints. According to Marsh McLennan, war risk premiums for hull and machinery insurance have jumped from 0.125% to roughly 0.2% of ship value since the Israel-Iran conflict escalated. For a $100 million vessel, that's a jump from $125,000 to $200,000. The higher price reflects rising concern among underwriters that a broader regional escalationor even a single high-profile incidentcould disrupt the already fragile Gulf shipping lanes. Shipowners aren't just facing abstract risks. This week, two tankers collided near the Strait, with at least one vessel reportedly transmitting erratic signals, fueling speculation about potential electronic interference. Meanwhile, insurers are increasingly uneasy that Houthi forces may expand their attack scope beyond just U.S., U.K., or Israeli-affiliated vessels. Marcus Baker, global head of marine and cargo at Marsh, said that while no missiles have hit ships in the Gulf so far, the industry is pricing in a far more volatile backdrop. With the war insurance market on edge, rates could rise further in the weeks ahead. Some insurers may pull back entirely. Others might lean in, betting on outsized gains in a high-risk, high-reward environment. War itself, as an insurance product, tends to be either you lose everything or make a fortune, Baker noted. That dynamicuncertainty mixed with profit potentialis exactly what keeps investors alert. For companies exposed to shipping or energy, including Tesla (NASDAQ:TSLA), which relies on stable supply chains, risks in the Strait could become a meaningful cost variable. As the conflict simmers, the market is recalibrating what it costs to move oil through one of the most strategically sensitive stretches of water on the planet. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
War Premiums Explode: Oil Tankers Face 60% Surge to Cross World's Most Dangerous Waterway
Insurance costs are rising fast for oil tankers passing through the Strait of Hormuzone of the world's most critical energy chokepoints. According to Marsh McLennan, war risk premiums for hull and machinery insurance have jumped from 0.125% to roughly 0.2% of ship value since the Israel-Iran conflict escalated. For a $100 million vessel, that's a jump from $125,000 to $200,000. The higher price reflects rising concern among underwriters that a broader regional escalationor even a single high-profile incidentcould disrupt the already fragile Gulf shipping lanes. Shipowners aren't just facing abstract risks. This week, two tankers collided near the Strait, with at least one vessel reportedly transmitting erratic signals, fueling speculation about potential electronic interference. Meanwhile, insurers are increasingly uneasy that Houthi forces may expand their attack scope beyond just U.S., U.K., or Israeli-affiliated vessels. Marcus Baker, global head of marine and cargo at Marsh, said that while no missiles have hit ships in the Gulf so far, the industry is pricing in a far more volatile backdrop. With the war insurance market on edge, rates could rise further in the weeks ahead. Some insurers may pull back entirely. Others might lean in, betting on outsized gains in a high-risk, high-reward environment. War itself, as an insurance product, tends to be either you lose everything or make a fortune, Baker noted. That dynamicuncertainty mixed with profit potentialis exactly what keeps investors alert. For companies exposed to shipping or energy, including Tesla (NASDAQ:TSLA), which relies on stable supply chains, risks in the Strait could become a meaningful cost variable. As the conflict simmers, the market is recalibrating what it costs to move oil through one of the most strategically sensitive stretches of water on the planet. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Khaleej Times
2 days ago
- Business
- Khaleej Times
Shipping costs surge as Israel-Iran conflict fuels risk in Gulf waters
Global shipping costs are soaring as the Israel-Iran war escalates, prompting insurers to raise premiums sharply for vessels passing through critical maritime chokepoints such as the Strait of Hormuz and Israeli ports. The rise in shipping risk and associated costs threatens to upend regional trade flows and strain global supply chains already reeling from ongoing Red Sea disruptions. According to data from Marsh McLennan, the world's largest insurance broker, insurance prices for ships transiting the Strait of Hormuz have surged more than 60 per cent since the conflict erupted. Hull and machinery insurance premiums — covering damage to the vessel itself — have increased from 0.125 per cent to around 0.2 per cent of a ship's value. This means insurance for a vessel worth $100 million now costs $200,000, up from $125,000. 'We've not yet seen a missile fired at a ship in the Arabian Gulf, but the pricing clearly reflects heightened market concerns,' said Marcus Baker, Global Head of Marine and Cargo Insurance at Marsh. 'The premium hike is a direct reflection of perceived risk.' The Strait of Hormuz, which connects the Gulf to the Arabian Sea between Iran and Oman, is one of the world's most vital oil transit routes, with nearly a fifth of global crude passing through its narrow waters. Any disruption or escalation of hostilities in the area could have profound consequences on global energy security and freight logistics. Further compounding shipping risks, war risk insurance premiums for voyages to Israel have more than tripled since the conflict began. Industry sources said rates have jumped to between 0.7 and 1.0 per cent of a ship's value for a seven-day voyage to Israeli ports, up from around 0.2 per cent a week earlier. These surcharges translate into tens of thousands of dollars in additional operating costs per voyage. 'Each voyage to Israeli ports is being underwritten on a case-by-case basis now,' said David Smith, Head of Marine at insurance broker McGill and Partners. 'Rates can go up to 1 per cent depending on the ship's ownership, cargo type, and destination.' Ports in Israel — such as Ashdod in the south, Haifa in the north, and Eilat on the Red Sea — are vital gateways for the country's imports. While Haifa port operations reportedly remain normal, nearly 30 ships were seen anchored offshore as of Tuesday, according to MarineTraffic data. The Bazan Group, operator of Israel's largest oil refinery in Haifa, shut the plant on June 16 after an Iranian missile strike damaged its power station. Shipping companies are increasingly hesitant to call at Israeli ports amid these heightened risks. The Iran-backed Houthi militia in Yemen has also warned it would target vessels linked to Israel, despite a truce on US and UK-related targets in the Red Sea. In March, the Houthis announced a self-declared 'maritime blockade' on Haifa port in response to Israel's Gaza offensive, escalating threats to regional shipping lanes. The growing risks have also raised alarm in global financial and insurance circles. In its latest analysis, S&P Global Ratings noted that insurers and banks across the Middle East are bracing for potential fallout. The agency pointed to an Israeli government scheme in place to absorb most conflict-related insurance losses, while insurers in the Gulf Cooperation Council (GCC) remain well-capitalised and resilient. 'GCC insurers benefit from robust capital buffers, and Israeli banks are being supported by state-backed safety nets to shield the financial system from major disruption,' S&P said. Fitch Ratings echoed similar concerns. In a report released this week, the agency warned that the Israel-Iran conflict has raised geopolitical and security risks across the Middle East. Although Fitch expects the fighting to remain localised and relatively short-lived, the firm cautioned that broader escalation — such as attacks on US targets or GCC bases — could have severe implications for sovereign credit profiles, energy markets, and regional economies. 'The most severe scenarios — like a disruption of traffic through the Strait of Hormuz — are not part of our baseline, but they cannot be ruled out entirely,' Fitch analysts said. 'Such a disruption would drive oil prices higher for a sustained period and cause negative spillovers for regional sovereigns, even as energy exporters benefit from price gains.' One key concern is the potential impact on Egypt's earnings from the Suez Canal if Houthi attacks were to intensify and dissuade ships from using the route. Egypt, Jordan, and other nearby economies that depend on tourism and trade are also exposed to downside risks. Jordan's tourism sector, for example, is already seeing a drop in European arrivals, threatening fiscal revenues and economic growth. While most shipping lanes remain open and operations continue, insurers and governments are monitoring the evolving situation closely. The immediate effect is already visible in spiking insurance costs, delayed cargo deliveries, and logistical uncertainties — all of which threaten to add inflationary pressures at a time when global trade is struggling to stabilise.
Bloomberg
2 days ago
- Business
- Bloomberg
Mideast Ship Insurance Costs Jump Following Iran-Israel Attacks
The cost of insurance for ships sailing in the Persian Gulf jumped as attacks between Iran and Israel raised risks for vessels in the area. Underwriters are now charging 0.2% of the value of a ship for calls into the Gulf, up from 0.125% prior to the conflict breaking out, according to Marcus Baker, global head of marine cargo and logistics at Marsh McLennan, the largest insurance broker. Rates have also climbed for calls into the Red Sea, he said.
