London marine insurers have widened the Red Sea high-risk zone after Houthi attacks on Saudi-linked vessels, with war risk premiums rising for ships serving Saudi ports and regional routes.AI generated image.
London marine insurers have extended the Red Sea area designated as high risk following Houthi attacks on two Saudi-linked vessels. The change is expected to raise war risk insurance costs for ships using the regional trade and energy route.
The Joint War Committee moved its notification boundary further north after the vessels were attacked in the days following the Houthis’ maritime embargo announcement on 20 July.
The Iran-aligned group said the embargo against Saudi Arabia marked a new front against the United States and its allies in the conflict involving Iran.
Neil Roberts, head of marine and aviation at the Lloyd’s Market Association and secretary of the committee, said the revised listed areas reflected the escalation in Houthi activity and attacks on Saudi vessels in the Red Sea.
The Joint War Committee includes Lloyd’s Market Association syndicate members and representatives of the London insurance market. Marine underwriters use its high-risk area list when assessing war risk premiums.
Insurance industry sources said indicative premiums for Saudi ports north of Jizan had risen to about 1% of a ship’s value from 0.25% earlier in the week. The affected ports include Jeddah and the Yanbu oil export terminal.
Rates for voyages through the southern Red Sea have increased to between 1% and 2% of a vessel’s value. Before the embargo announcement, the rate was around 0.3%.
War risk insurance costs had begun increasing immediately after the Houthis announced the measure. Indicative premiums initially rose to approximately 0.75% of a ship’s value from about 0.3%, according to industry sources.
An increase in the premium rate can add hundreds of thousands of dollars to the insurance cost of a seven-day voyage.
The Houthis described the measure as a naval blockade of Saudi Arabia. The available information does not establish how the group would enforce it or whether commercial shipping attacks would resume.
British maritime security company Ambrey assessed Saudi Arabia-flagged, owned or operated vessels as facing a high risk of attack. Its assessment also covered ships travelling to or from Saudi Arabia and vessels calling at Saudi ports on the Red Sea.
Ambrey said outdated company affiliation data had contributed to targeting errors during the 2024 Red Sea crisis, creating a risk that ships could again be attacked because of mistaken identity.
Saudi Aramco has increased its use of the Yanbu terminal since the U.S.-Israeli conflict with Iran began on 28 February.
The Bab el-Mandeb Strait connects the Red Sea with the Gulf of Aden and carries global trade and oil shipments. The reference data stated that a complete closure would stop Saudi oil exports to Asia and could reduce global oil supply by 7%.
Red Sea shipping traffic has not fully recovered since the Houthis began attacking vessels off Yemen in November 2023. The group said the attacks supported Palestinians during the Gaza war. Some attacks continued until mid-2025 and ended after the Gaza ceasefire in October last year.
Source: HMT News