FT: Insurance of ships in the Black Sea has tripled in price after Ukrainian attacks on the “shadow fleet” of the Russian Federation

A fire aboard the Kairos tanker in the Black Sea on November 28. Photo: Getty Images

The cost of insurance for ships carrying out transportation in the Black Sea has tripled over the past month and is likely to continue to rise amid Ukraine’s active attacks on Russian port infrastructure and “shadow fleet” tankers.

Source: Financial Times

Details: According to insurance brokers, war risk insurance prices jumped from 0.25-0.3% of the ship’s value in early November to 0.5-0.75% in early December. In fact, we are talking about a 250% price increase.

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The head of the marine transportation department of the Marsh brokerage company, Markus Baker, noted that the biggest price increase was recorded in the areas of the Black Sea adjacent to Russia, as well as near Ukraine, Georgia and Turkey.

“Russia is going to escalate the situation in Ukraine, so we’re likely to see further rate increases in that region,” Baker said.

The publication notes that the increase in prices was provoked by attacks by Ukrainian special forces on infrastructure, in particular the port of Novorossiysk, as well as the hunt for oil tankers, which Moscow uses to circumvent Western sanctions.

In particular, last Friday, November 28, Ukrainian drones struck two sanctioned tankers Kairos and Virat off the coast of Turkey. An attack on the ship Midvolga-2 was also reported, although Ukraine denied involvement before this incident.

The situation on the market was also confused by the explosion in Turkish tankers off the coast of Senegal. After the incident, the ship’s owner, the Istanbul company Besiktas Shipping, announced the suspension of all flights connected to the Russian Federation.

According to market participants, tariffs for tankers and bulkers connected to Russia have increased most sharply. Maritime security experts say incidents like these make shipowners worry that even vessels engaged in legal trade could be targeted.

Analysts fear that Ukraine’s successful attacks could prompt Russia to retaliate against Ukraine’s grain and ammonia exports.

Prehistory:

• The leader of the Kremlin is Vladimir Putin statedthat Russia will increase its attacks on Ukrainian ports and ships entering them, against the background of drone attacks on Russian tankers in the Black Sea.
• Andriy Klymenko, Head of the Monitoring Group of the Institute of Black Sea Strategic Studies convincedthat Russia deliberately attacked the gas carrier in the port of Izmail in order to scare off shipowners who ensure the delivery of cargo to Ukrainian ports.

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