Ship insurers primed to raise rates after Red Sea attacks | Press Agency in Battle Creek MI, USA

Press Agency in Battle Creek MI  | Apadana media

LONDON (Reuters) – Insurers are set to raise the cost of providing cover for merchant ships through the Red Sea after a series of incidents that have hit vessels around Saudi Arabian waters, industry sources said.

The possibility of more attacks on commercial shipping carrying oil and commodities through these waterways is growing after the outgoing U.S. administration’s move to designate Yemen’s Iran-aligned Houthi movement as a foreign terrorist organisation.

“We are seeing increased rates for vessels making port calls in the Red Sea due to concerns over risk of attack by militia groups, whereas previously this was of an issue of more concern in the Arabian Gulf,” said Mike Ingham with insurance broker Gallagher. “This will be impacting vessels travelling to Red Sea ports such as Jeddah.”

Every ship needs various forms of insurance, including annual war-risk cover as well as an additional “breach” premium when entering high-risk areas. These separate premiums are calculated according to the value of the ship, or hull, for a seven-day period.

Breach rates have ticked up to around 0.015% of insurance costs from about 0.012% in late December, equating to tens of thousands of dollars for a seven-day voyage, according to market estimates.

“The real debate is on the Red Sea side after the incidents involving explosive devices. Everyone is watching what happens next,” one war underwriter said.

Saudi Arabia said last month that a tanker anchored at Jeddah port was hit by an explosive-laden boat in what it called a terrorist attack. This followed a separate incident at another Saudi terminal on the Red Sea where a tanker was damaged by an explosion.

The U.S. Maritime Administration warned seafarers last week that “heightened military activity and increased political tensions in this region continue to pose serious threats to commercial vessels.”

The Red Sea is one of the world’s busiest shipping lanes leading up to the Suez Canal, with thousands of transits made annually through the Bab al-Mandab waterway at its southern tip.

There are wider tensions after the seizure by Iran last week of a South Korean tanker further away in the Strait of Hormuz.

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October 14, 2020

By Issam Abdallah

NAQOURA, Lebanon (Reuters) – Long-time foes Lebanon and Israel launched talks on Wednesday over their disputed sea border (maritime border) in a brief meeting which the lead Lebanese negotiator described as “the first step on a thousand-mile journey.”

The talks were mediated by the United States, which has pushed for years for negotiations to resolve the dispute and brokered deals last month for two Gulf Arab states to establish full ties with Israel, in a major Middle East realignment.

Both Lebanon and Israel had played down expectations for Wednesday’s meeting which was held outdoors under blue canvas covers near the two countries’ land border.

The talks, the first to be held over the disputed sea boundary(maritime border), broke up after barely an hour and both sides agreed to meet again in two weeks.

The United States and United Nations, which hosted the meeting, described it as productive, while Israel’s Energy Minister Yuval Steinitz said the Israeli delegation would push ahead with the talks “to give the process a chance”.

Agreement to hold the talks was announced weeks after the United States stepped up pressure on allies of Lebanon’s Iran-backed Hezbollah, imposing sanctions on a senior politician from its main Shi’ite ally, the Amal party.

Hezbollah, which fought a month-long war with Israel in 2006, says the talks are not a sign of peace-making with its long-time enemy.

(Graphic: Overlapping claims in disputed east Med exploration area Overlapping claims in disputed east Med exploration area, https://graphics.reuters.com/LEBANON-ISRAEL/TALKS/ygdvznygmvw/LEBANON-ISRAEL.jpg)

“Our meeting today will launch the train of technical, indirect negotiations, and represents the first step on a thousand-mile journey for demarcating the southern borders,” the Lebanese army quoted delegation head Brigadier General Bassam Yassin as saying.

“We look forward…to achieving this file within a reasonable time frame.”

GAS-RICH WATERS?

Disagreement over the sea border had discouraged oil and gas exploration near the disputed line.

Israel already pumps gas from huge offshore fields but Lebanon, which has yet to find commercial gas reserves in its own waters, is desperate for cash from foreign donors as it faces the worst economic crisis since its 1975-1990 civil war.

The financial meltdown has been compounded by the COVID-19 pandemic and by an explosion that wrecked a swathe of Beirut in August, killing nearly 200 people.

Wednesday’s meeting was hosted by the United Nations, which has monitored the land boundary since Israel withdrew from south Lebanon in 2000 at the end of a 22-year occupation.

Lebanese sources originally said the next talks will be held on Oct 28, but a statement from President Michel Aoun’s office said they would take place two days earlier on Oct. 26.

Hours before the meeting, Hezbollah and Amal called for changes to the Lebanese negotiating team to ensure it included only military officials. The Lebanese presidency has said the talks would be purely technical.

The talks come after the United Arab Emirates and Bahrain agreed to establish full relations with Israel, under U.S.-brokered deals which realign some of Washington’s closest Middle East allies against Iran.

(Reporting by Dominic Evans, Ellen Francis and Issam Abdallah in Lebanon and Ari Rabinovitchin Jerusalem; Editing by Samia Nakhoul, William Maclean)

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