Gulf war risk premiums surge as insurers expand danger zone

London’s marine insurance market has widened the stretch of Gulf waters it considers high risk after escalating conflict in the Middle East raised fears of disruption to shipping routes and global supply chains.

The decision was announced in guidance issued by the Joint War Committee, a body made up of syndicate members from the Lloyd’s Market Association and representatives from the London insurance market.

The committee’s recommendations are closely followed by marine underwriters and play a critical role in determining whether additional war risk premiums apply to vessels operating in certain regions.

According to the advisory, the committee has added waters around Bahrain, Djibouti, Kuwait, Oman and Qatar to its list of areas facing heightened war related risk.

The expansion follows recent military developments in the region that have increased concerns about threats to commercial shipping.

Neil Roberts, secretary of the Joint War Committee, said the changes were agreed during a meeting held on Monday after members reviewed the evolving security environment.

“In light of recent events, the committee agreed to revise the listed areas,” Roberts said, noting that the designated waters had been assessed as locations where vessels could face increased exposure to war related perils.

The revision comes amid rapidly rising insurance costs for ships operating in the Gulf region. War risk premiums for vessels transiting the area have increased sharply in recent days, according to market participants.

Industry estimates suggest premiums have risen roughly fivefold compared with levels seen a week earlier, before the United States and Israel began airstrikes targeting Iran.

For large commercial vessels transporting oil, liquefied natural gas or other commodities, the increase can translate into hundreds of thousands of dollars in additional insurance costs for a single voyage.

Marine insurers say the expansion of the high risk designation is designed to ensure shipping companies are adequately covered as geopolitical tensions increase.

Sources in the insurance market said extending the war risk area across a broader section of Gulf waterways was also intended to close coverage gaps that could have left ships exposed while traveling between previously designated zones.

Without the updated classification, vessels might have moved through areas facing similar security threats without the protection of war risk insurance policies that are automatically triggered in officially listed regions.

Shipping companies and energy traders are closely watching the changes as the Gulf remains one of the most important corridors for global energy shipments.

The region’s maritime routes carry a significant share of the world’s crude oil, natural gas and refined fuel exports.

Any disruption to these shipping lanes could ripple across international energy markets and commodity supply chains.

Munro Anderson of marine war insurance specialist Vessel Protect said the revised risk designation was intended to bring greater clarity to insurers and shipping operators navigating the region.

“The expanded designation helps stabilize global supply chains by reducing uncertainty around the movement of energy, commodities and essential goods,” Anderson said.

The move illustrates how geopolitical conflict is rapidly translating into financial risk for shipping companies, insurers and commodity markets.

As tensions escalate, marine insurers are adjusting risk assessments and pricing models to reflect the possibility of attacks on vessels, ports or critical infrastructure.

For the global maritime industry, the widening of the Gulf war risk zone signals that insurers expect heightened instability to persist, with implications not only for insurance premiums but also for the cost and reliability of global trade.