Red Sea insurance nearly doubles after attacked tanker appears to be leaking oil

The cost of insurance for ships sailing through the Red Sea has nearly doubled after Yemen’s Houthis attacked a tanker that appears to be leaking oil, raising environmental fears for the trade route, industry sources said on Wednesday.

Iran-aligned Houthi militants first launched drone and missile airstrikes on the waterway in November in what they say is solidarity with Palestinians in Gaza. In more than 70 attacks, they sank two ships, captured another and killed at least three sailors.

In the latest escalation, the Greek-flagged tanker Sounion was attacked by multiple projectiles last week and appears to be leaking oil, the Pentagon said Tuesday.

Houthi-Hit tanker in Red Sea appears to be leaking: Pentagon

A third party tried to send two tugboats to help rescue the Sounion, but the Houthis threatened to attack them, the Pentagon added.

Insurance industry sources, speaking on condition of anonymity, said on Wednesday that additional war risk premiums, paid when ships sail through the Red Sea, had been raised to 0.75 percent of the ship from 0.4 percent before the attack , although they were higher at 1% in February, according to industry assessments of risk levels.

The latest cost hike can add up to hundreds of thousands of dollars for a trip through the region, although fares for Chinese-owned ships have been up to 50 percent lower since February because of the lower risk of being targeted, sources added.

An industry source said some insurers currently do not offer cover in the region because of the potential risk of tank sinking.

An official from the European Union’s Aspides naval mission cited an Aug. 28 letter sent to maritime rescue coordination centers as saying it was assessing the “feasibility of protective measures” such as towing the Sounion.

“This situation poses a serious and imminent regional pollution threat, with coastal states at greatest risk,” the letter said.

One million barrels of crude oil

A maritime security source said Wednesday there were fires on board the tanker, which was carrying a cargo of 1 million barrels of crude oil.

“Delta Tankers is doing everything it can to move the vessel (and the cargo),” Sounion’s manager told Reuters separately.

“For security reasons, we are unable to comment further.”

The Houthis said they attacked the tanker in part because Delta Tankers violated its ban on “entering ports in occupied Palestine,” Houthi military spokesman Yahya Saree said in a televised address.

A Houthi source also told Reuters on Wednesday that the ship was burning, adding that there would be no spillage or pollution at sea as a result.

While the crew had been evacuated, the Houthis “appear determined to sink the ship and its cargo at sea,” US State Department spokesman Matthew Miller said on August 24.

The Sunion was the third vessel operated by Athens-based Delta Tankers to be attacked in the Red Sea this month. The attack caused a fire on board, which the crew extinguished, Delta Tankers said in an earlier statement.

A major oil spill would devastate fishing communities on Yemen’s Red Sea coast, with half a million Yemenis working in the industry, the United Nations said in a report last year.

“Entire communities would be exposed to life-threatening toxins,” the UN said.

(Reporting by Jonathan Saul and Carolyn Cohn in London, Mohammed Ghobari in Aden and Eleftherios Papadimas in Athens; Editing by Barbara Lewis)

Photo: This photo released by the European Union’s Operation Aspides shows fires burning aboard the Sounion oil tanker in the Red Sea on Sunday, Aug. 25, 2024. (European Union’s Operation Aspides via AP)

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