Insurance association says Iran threat remains high for tankers

Insurance association says Iran threat remains high for tankers
Published: 25 August 2019 - 9:54 a.m.
By: Logistics Middle East Staff

The threat remains “highly likely” of more attacks by Iran on commercial shipping in the Strait of Hormuz according to the Norwegian Shipowners’ Mutual War Risks Insurance Association (DNK), the world’s largest war risk insurer.

“We think it’s highly likely that they will continue to perform asymmetric attacks, similar attacks to those we’ve at Fujairah anchorage, or Front Altair and the Kokuka Courageous,” said Lars Benjamin Vold, senior intelligence & exercise advisor for DNK.

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He was speaking at breakfast seminar held by Wilhelmsen Ship Management (WSM) in Singapore on Friday, and his comments were first reported by Seatrade.

“Asymmetric attacks provide them [the Iranians] with plausible deniability, they can say ‘Ok this wasn’t us’,” Vold added, referring to the six tankers that have been attacked in the Strait this year.

Four tankers were hit by what were believed to explosions from limpet mines while at anchorage in the port of Fujairah on May 12th, and two were attacked while underway on June 13th.

DNK member vessels Andrea Victory and the Front Altair were involved in the two previous sets of attacks.

“We believe there is a high threat in this area towards oil and gas related assets, and we believe it’s a moderate threat to other types of tonnage. And we believe it’s a moderate threat to all types of tonnage off Oman, Qatar and Kuwait,” said Vold.

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In terms of the financial impact on the industry DNK CEO Svein Ringbakken explained that war risks insurance rates for ships operating in the area had increased ten-fold since the attacks.

Oil tankers transiting the area can pay up to $300,000 – 400 000 in war risks insurance premium to transit the Strait of Hormuz and operate in the area.

For the war risk market Vold said: “We believe the recent cumulative losses for the war risks insurance market in the Middle East/Gulf region have exceeded $100m with a margin”.

DNK insures more than 3 000 ships against the risks of war and they are insured for more than $217bn. It insurers 30 – 40 vessels operating in the Middle East Gulf region at any given time.

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