Merchant ships sailing the Black Sea are facing insurance costs as high as $5 million to include additional war-risk premium.
Underwriters are charging 10 percent of the ship’s hull or the vessel’s worth as an asset. A $50 million tanker would have to pay $5 million for insurance premium, a report said.
The premium charges were motivated by possible damage to vessels, either through missile attack or possible mines. Russian and Ukrainian navies could also seize vessels for uses related to national security. The war in Ukraine has impacted trade through the Black Sea, an export hub of crops, oil, fuels and raw materials.
Bloomberg reported that the premium cost would most likely exceed the price of hiring a ship. Hiring a vessel to ship a million-barrel cargo to Italy from Russia has increased to $3.5 million from $700,000 earlier this year.
The report also said that insurers may possibly charge additional premiums for more Russian ports as the war in Ukraine continues.
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