Major Marine Insurance Companies Announce Cancellation of War Risk Coverage in Waters of Iran and the Arabian Gulf Starting March 5

SadaNews - Major marine insurance companies have announced the cancellation of war risk coverage for ships passing through the waters of Iran and the Arabian Gulf starting March 5, in a move that reflects the escalation of military tensions in the region and the increasing risks to maritime traffic.

The decision comes in the wake of sharp field developments that have led to a near-complete halt of ship movements in the Strait of Hormuz, one of the world's most important waterways for oil transport, causing hundreds of tankers and commercial vessels to accumulate in open waters of the Arabian Gulf, according to a report by Reuters.

Fears have intensified after at least three oil tankers sustained damage off the coast of the Arabian Gulf in incidents that have heightened shipping and energy companies' concerns about the safety of ship crews and cargoes.

The cancellation of war risk coverage – essential insurance documents that allow ships to navigate high-risk areas – has immediately led to a spike in shipping costs, with several shipping companies hesitant to enter the region due to the lack of insurance coverage.

Major energy companies have also announced a temporary suspension of oil and gas shipments through the strait, awaiting clarity on the security situation, which threatens to disrupt global energy supplies and raise oil prices in international markets.

The Strait of Hormuz is a vital artery for global trade, as a significant percentage of oil and gas exports from Gulf countries pass through it to Asian and European markets, making any disruption there have a direct impact on the global economy.

Markets are anticipating possible international actions to contain the escalation and ensure freedom of navigation, as concerns grow over the widening of the crisis and its repercussions on supply chains and global inflation.