Insurance rates 10-folded after attacks in Strait of Hormuz: shipping CEO says

TEHRAN, Jul. 10 (MNA) – Insurance rates for tankers transiting through the world’s most important oil choke point have skyrocketed in recent weeks, CNBC quoted the CEO of a US-listed shipping company as saying.

“As a shipping company and part of the global shipping industry, we are taking the threat to our crew and ships very seriously,” Anthony Gurnee, CEO of Ardmore Shipping, said on Tuesday.

Ardmore Shipping is a US-listed company based in Ireland, with a business of owning and operating a fleet of tankers that move refined oil products.

“At the moment, it is business as usual (but) insurance to transit the Strait of Hormuz, a strategically important waterway which separates Iran, Oman and the United Arab Emirates, has actually increased 10-fold in the last two months as a consequence of the attacks,” Gurnee said.

Insurance rates

Every ship needs various forms of insurance, including annual war-risk cover as well as an additional ‘breach’ premium when entering high-risk areas. These separate premiums are calculated according to the value of the ship, or hull, for a seven-day period, Reuters reported.

Last month, a Nikkei Asian Review report citing Japanese industry sources said additional insurance for tankers sailing through the Strait of Hormuz now cost 10 times what it did before two ships were attacked earlier in June.

CNBC has not been able to independently verify these sources.

The Nikkei Asia Review report said insurers began imposing an additional charge of 0.025% of ship value on tankers transiting through the Strait of Hormuz after four tankers were attacked off the coast of the United Arab Emirates in late May. This extra charge has since jumped up to 0.25% since the June 13 attacks, the report added.

In mid-June, two oil tankers – one sailing under a Panama flag and owned by Japan and another bearing the Marshall Islands’ ensign owned by Norwegian Frontline – were hit by yet unspecified accidents in the Sea of Oman. Iranian rescuers rushed to the assistance, transferring all of their 44 crew members to Iran's southern shores. Following the attack, US Secretary of State Mike Pompeo accused Iran of carrying out the attacks without providing any evidence to back up his accusation. In a statement, the Iranian mission to the UN strongly rejected the “unfounded” US claims, warning of "another Iranophobic campaign" being waged by Washington and its allies.

A week later, A US Global Hawk spy drone intruded into Iranian airspace and the Islamic Revolutionary Guards Corps brought it down after the drone ignored Iran’s several warnings. IRGC says there was another intruding US manned plane beside the Global Hawk but the force ‘refrained’ from targeting it. Iran had earlier revealed other sections of the US drone which were retrieved from the Iranian waters after the incident. Iran has provided sufficient evidence proving that the UAV had violated Iran’s airspace, including exact coordinates of the place as well as sections of the vehicle’s wreckage which were retrieved from Iranian waters. Tehran also said it will take the case to the UN.

Later in early July, British Royal Marines in Gibraltar stormed the Iran-operated 300,000-tonne Grace 1 and detained it, accusing it of carrying oil to Syria in possible violation of the European Union’s sanctions on the Arab country. Iran condemned the move as “maritime piracy” and summoned Britain’s ambassador in protest over it. Secretary of Iran’s Expediency Council Mohsen Rezaei called for the reciprocal seizure of a British oil tanker in case London refuses to release the vessel. Spokesman of the Iranian Ministry of Foreign Affairs Abbas Mousavi said Tehran would continue legal and political measures until the release of the Iranian oil tanker seized by British Marines. Briefing reporters on Monday, Mousavi said the British Ambassador to Tehran had been summoned twice and there had been consultations with European diplomats regarding the issue.

All the incidents and attacks brought the US and Iran close to conflict last month. 

Washington has blamed Iran for the attacks on four oil tankers in the same area on May 12. Tehran has denied the allegations.

The Strait of Hormuz is seen as one of the most important waterways in the world, linking crude producers in the Middle East with key markets in the rest of the world.

It plays a pivotal role for Asian economies that are heavily dependent on oil imports from the Middle East.


News Code 147460


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