Iran US Airstrikes: Will war risk insurance premiums rise for vessels in Middle East? Here's insurance costs for ships passing through Gulf region as oil companies remove foreign staff from Iraq
FILE PHOTO: Oil tankers pass through the Strait of Hormuz, December 21, 2018. REUTERS/Hamad I Mohammed/File Photo
Synopsis War risk insurance premiums for Gulf shipping have increased after US airstrikes on Iran. Oil firms BP, Eni, and TotalEnergies are evacuating foreign staff from Iraqi oilfields. Iraq's oil output remains stable. Chinese and Russian companies have not changed their operations. Costs for shipping are rising sharply. Insurance costs for ships passing through the Gulf region have increased after US strikes on Iran's nuclear sites. Oil companies are removing foreign staff from Iraq, but production remains steady.
ADVERTISEMENT War risk insurance for vessels entering the Middle East Gulf has risen to 0.5%. Last week, the rate was between 0.2% and 0.3%. The increase followed US military action against Iranian nuclear facilities. Sources from the insurance industry confirmed this to Reuters and The Insurer.The premium rise affects the total cost of a seven-day journey through the Gulf. The premium is calculated based on the ship's value. The increase adds tens of thousands of dollars per day to the overall expense. Each ship is evaluated individually by underwriters, but 0.5% was a common rate as of Monday.
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BP, Eni and TotalEnergies have begun removing foreign staff from oilfields in Iraq. The Basra Oil Company confirmed this action. These companies operate in different parts of Iraq's southern oilfields. Iraq shares a border with Iran, where tensions have grown after recent military actions.Despite evacuations, oil production in Iraq is stable. Exports from the southern oilfields remain at 3.32 million barrels per day. Two officials from Iraq's oil industry confirmed this. Basra Oil says the removal of foreign staff has not affected production levels so far.
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BP has pulled out foreign workers from the Rumaila field. Italy's Eni cut staff at the Zubair field from 260 to 98. Those who remain continue to work with local teams. A spokesperson for Eni called the move a precaution and said the company is watching the situation closely.
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TotalEnergies has evacuated 60% of its foreign workers. The company has not commented publicly. Basra Oil says production is not affected. Chinese-run oilfields like West Qurna/1, Siba, and Faihaa are operating without any staff reductions. Russian company Lukoil has also reported no disruptions.
ADVERTISEMENT Why have insurance premiums for Gulf shipping increased?
The premiums rose due to US strikes on Iran and concerns over shipping risks through the Strait of Hormuz.
Is Iraq's oil production affected by staff evacuations?
No, Iraq's oil output continues normally despite the temporary evacuation of some foreign personnel.
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