Insurers pull Red Sea war cover for Saudi-linked ships

Yemen's Houthi movement has thrown global shipping into disarray after declaring a naval blockade against Saudi Arabia and attacking two Saudi oil tankers, prompting marine insurers to restrict war-risk coverage and sending oil prices above $100 a barrel.

Attacks on Saudi Tankers Escalate Crisis

The Houthis announced a maritime embargo against Saudi Arabia on July 20, framing it as retaliation for airstrikes on Sanaa airport. Days later, Houthi military spokesperson Yahya Saree said forces struck two Saudi tankers, the Encelia and Layla, using ballistic missiles, cruise missiles, and drones. Saudi Arabia's Transport General Authority confirmed the attack on the Encelia, reporting a fire aboard the vessel, though all crew were safe.youtube+4

At least seven oil tankers executed sharp U-turns near Yemen after the embargo declaration, according to ship-tracking data reported by the BBC, with all vessels either heading to or departing from Saudi ports. A large cargo ship was turned back on Tuesday, one of six vessels that reversed course as the group began enforcing its blockade, according to the Washington Post citing Lloyd's List data.washingtonpost+1

Insurers Retreat From Saudi-Linked Vessels

Major insurers at Lloyd's of London have told brokers they will exclude vessels with any "Saudi touchpoints" from war-risk cargo coverage in the Red Sea. Ascot and Navium informed brokers they were preparing to withdraw policies following the tanker attacks, with some canceling existing coverage for Saudi-linked vessels.ontimebrief

War risk premiums for voyages through the southern Red Sea more than tripled from around 0.3% of a ship's value before the Houthi announcement to over 1% by Thursday, according to Reuters Thomson Reuters Corporation ↗ 2.92%. Rates for Saudi-linked ships calling at southern Saudi ports such as Jizan were quoted as high as 3%.marinelink+1

Oil Surges Past $100 as Dual Chokepoints Close

Brent crude surged past $100 a barrel on July 23 for the first time since May, settling up 7% after the tanker attacks compounded fears about supply disruptions through both the Strait of Hormuz and Bab el-Mandeb. Goldman Sachs ↘ 1.38% warned that Brent could exceed $120 in the fourth quarter if the Strait of Hormuz remains disrupted.businesstimes+2

The Danish-flagged oil products tanker Torm Innovation will now sail to Asia via the Suez Canal and around the Cape of Good Hope, its owner Torm ↘ 0.61% confirmed on Friday. "This reflects our cautious approach to crew safety, which remains our highest priority," a Torm spokesperson said.boereport+1

The dual closure of two of the world's most critical maritime chokepoints has left shippers with few options beyond the costly African detour, raising the prospect of prolonged disruption to global energy flows.