How shipping insurance rates are rising, as Hormuz, Bab al-Mandeb shut down
Shipping insurance rates have surged significantly due to ongoing military conflicts and blockades in the Strait of Hormuz and the Bab al-Mandeb Strait. Iranian forces have claimed control over the Strait of Hormuz, leading to increased tensions and disruptions for global oil tanker traffic.
Why it matters
These waterways are critical chokepoints for global energy supplies; sustained disruptions threaten to drive up global oil prices and increase inflation.
Insurance rates through Hormuz are currently four times the five-year average.
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Maritime insurance prices have soared amid shipping disruptions in the Strait of Hormuz and are also rising for vessels traversing the Bab al-Mandeb, with both waterways – critical channels for the global economy – now theatres of war.
Yemen’s Iran-aligned Houthi group announced a blockade of Saudi Arabian ports and ships in the Bab al-Mandeb Strait, which connects the Red Sea to the Indian Ocean, earlier this week.
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