Israel’s Maritime Industry Asks The Government To Aid With Jump In War Insurance

Ships bound for Israel face a 10-fold increase in war risk premiums as the battle in Gaza escalates, prompting industry to call on government officials to help ensure essential goods continue to arrive.

Israel has threatened to exterminate Hamas after its supporters swept through Israeli cities from Gaza on October 7, killing 1,400 people and kidnapping over 220 hostages.

Israel’s forces have responded with lethal air attacks and a military offensive on the tiny coastal strip, raising fears that the battle may escalate and engulf the entire region.

Israel, whose economy is based on seaborne trade, announced last week that it will compensate ships damaged by the battle.

However, industry executives are concerned that this may not be adequate.

Marine insurers consider Israeli waters a high-danger zone, and each vessel must pay an extra war risk premium, typically renewed on a seven-day basis.

Per industry sources, such premiums have increased tenfold in the past few weeks, incorporating tens of thousands more dollars into each voyage. As a result, freight expenses will rise.

Customers shipping to Israel will face a conflict risk fee, according to shipping companies Zim and HMM.

The finance ministry stated that subsidizing the cost of additional war risk premiums is not currently being considered. However, it is looking into different solutions that could offer an insurance defence for vessel owners without providing any details.

Uzi Itzhaki, the chair of the board of directors at the government-owned Israel Port Company, which is in charge of the upkeep and development of the ports of Haifa, Eilat, and Ashdod, was sure that government officials would take whatever actions were necessary to protect commerce, including covering risk premiums.

Per the Israeli government figures, nearly 8,000 rockets were fired from Gaza since October 7, even though Israel’s ports have not been attacked.

While the Ashkelon port has closed, other terminals remain open, and both Ashdod and Haifa are defended by Iron Dome air defence batteries.

Nevertheless, the concerns regarding the security of Israeli waters are mounting.

The Marshall Islands register, one of the world’s leading shipping flags, upgraded the safety level for Israeli waters to the maximum level on Tuesday, per industry insiders, which is likely to dissuade port visits.

COURSE CHANGE

According to data and analytics firm Kpler, one crude oil tanker heading for Ashkelon was redirected to Haifa recently, and another to Israel’s southern port of Eilat.

The vessels turned off AIS transponders due to worries about Israeli waters, according to Kepler data.

Israel Shipyards’ Fogel, who also serves as a partner in the Eilat port, thinks that the state maintains a critical pipeline to Ashkelon from Eilat, which might provide supplies for refineries.

He stated that, while Haifa seaport was more convenient due to its closeness to the nation’s refineries, Eilat port was more secure.

References: virtual jerusalem, reuters

Israel’s Maritime Industry Asks The Government To Aid With Jump In War Insurance appeared first on Marine Insight – The Maritime Industry Guide

Source: Maritime Shipping News