Insurance costs cloud product tanker outlook as Strait of Hormuz opening looms

As shipping markets look towards the reopening of Hormuz, a recent BRS Weekly Tanker Newsletter discussed the impact that high insurance costs could have on evacuating refined products and product tankers from the Middle East Gulf. This was quoted by Tradewinds: https://www.tradewindsnews.com/tankers/insurance-costs-cloud-product-tanker-outlook-as-strait-of-hormuz-opening-looms/2-1-2005349

"BRS Shipbrokers said insurance issues persist for clean tankers, as well as uncertainty over damage to refineries in the region. Since the outbreak of the Middle East conflict, additional war risk insurance premiums have stood at about 10% of hull value, BRS said.

“This cost is easily absorbed by still-stratospheric crude tanker freight rates, but there is evidence to suggest that smaller product tankers receiving lower rates have been discouraged from crossing Hormuz as insurance premiums are not so easily absorbed,” it added.

The broker believes that once the improved maritime security situation is reflected in lower insurance costs, more product tankers will be encouraged into the Gulf."

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