Kuwait: Gulf tensions raise the cost of insurance on local oil tankers by 775%
Source: Middle East Insurance Review | Nov 2019
The cost of insuring Kuwait’s oil tankers jumped by 775% in three months due to tensions in the Gulf region and international tankers being subjected to sabotage, reported Reuters.
A senior oil official in Kuwait said the insurance bill for tankers increased from $40,000 before the attacks that began in the Gulf region last May to $50,000 by the end of August.
He added that this surge came as the Strait of Hormuz lies in a war zone, and insurers obtained additional funds for the risk to the Kuwaiti and international oil tankers crossing this region.
Mr Tariq Al-Mashaan, a Kuwaiti economist, told Al-Arabi Al-Jadeed that the continuing tensions in the Gulf region would incur additional oil expenses as a result of insurance companies’ demands to raise the cost of tanker insurance.
Mr Al-Mashaan added that the rise in the cost of insurance by up to 755% in three months is illogical, and is putting strong pressure on the companies that own oil tankers, whether Gulf or international. They may have to move away from the Gulf region or refuse to sail because of this high and excessive cost.
Mr Issa al-Dhafiri, an oil expert said the cost of insurance on tankers is likely to increase further under current conditions. M