Yemen Monitor / Agencies:
Insurance industry sources reported that cargo shipping insurance costs through the Red Sea rose on Monday, after the Iran-aligned Houthi group in Yemen announced a naval blockade on Saudi Arabia, escalating the risks facing commercial shipping.
This step taken by the Houthis opens a new front against the U.S. in its war with Iran, and expands the scope of the threat facing global energy supplies and trade beyond the Gulf region.
According to the sources, who declined to be identified due to the sensitivity of the matter, indicative war risk insurance premiums rose to around 0.75% of a vessel’s value, compared to about 0.3% on Friday prior to the Houthi announcement.
The sources explained that even a minor change would translate into hundreds of thousands of dollars in additional costs for a seven-day voyage.
It remains unclear how the Houthis will enforce a naval blockade on Saudi Arabia—their northern neighbor stretching along the Red Sea coast—or whether this will include a return to launching attacks on shipping traffic.
Saudi oil giant Saudi Aramco, the world’s largest oil exporter, has increased its use of the Yanbu terminal on the Red Sea since the start of the US-Israeli conflict with Iran on February 28.
