Black Sea shipping insurance rates increased after Ukraine attacked tankers, sources said

The cost of shipping commodities through the Black Sea rose on Monday after Ukrainian naval drones attacked two tankers heading to a Russian port, with fears of further attacks raising the cost of war risk insurance, industry sources said.

The Black Sea is very important for shipping grain, oil and oil products. Its waters are shared by Bulgaria, Georgia, Romania and Türkiye, as well as Russia and Ukraine.

The war risk level for the seven-day shipping period, set by individual underwriters and based on the value of the ship, rose to 0.5 percent for calls to Ukrainian ports from 0.4 percent last week, shipping and insurance sources said.

War risk insurance for Russia’s Black Sea ports, which is usually higher, was recorded at between 0.65-0.8 percent compared to around 0.6 percent last week, the source added.

TANKER ATTACKED WHILE SAILING TO NOVOROSSIYSK

The two tankers, which are under Western sanctions, were attacked by naval drones while they were empty and sailing towards Novorossiysk, Russia’s main oil terminal on the Black Sea, an official with Ukraine’s Security Service told Reuters.

The incident in the Black Sea shows Ukraine’s campaign to limit Russian oil revenues is “shaping the assessment of underwriters’ intentions and capabilities,” said Munro Anderson, head of maritime war risk operations and insurance specialist Vessel Protect, part of Pen Underwriting.
“Prices have strengthened in line with that outlook. For the Russian port call, the underwriters are pricing in a wider range of possible attack locations and a higher likelihood of a repeat,” he said.

“As Ukrainian activity increases, the likelihood of Russian reciprocal action increases. This creates a more even risk gradient across the two trades than we have seen in recent times.”

Turkish President Tayyip Erdogan said on Monday that attacks on commercial vessels in the Black Sea were unacceptable, and issued a warning to “all parties concerned.”

The latest incidents in the Black Sea are the first attacks on non-military, non-Russian-flagged vessels in international waters, said Andrii Ryzhenko, a naval analyst and former deputy chief of staff of Ukraine’s navy.

Ryzhenko said it was unlikely that Russia would retaliate against commercial vessels heading to Ukraine while they were in the territorial waters of Turkiye, Bulgaria and Romania, as that would amount to an attack on NATO territory.

“They (Russia) attack (ships) all the time, at least in Ukrainian waters and use various types of weapons.”

MYSTERIOUS EXPLOSION

There have been at least seven separate explosions on tankers calling at Russian ports since December 2024 in locations including the Mediterranean, and Ukraine is suspected of carrying out the attacks, maritime security sources said. A Turkish oil tanker damaged near the coast of Senegal last week was hit by four external explosions, but there were no injuries or pollution, its manager said Monday.

The tanker Mersin previously stopped at a Russian port, and maritime security sources said their initial assessment was that the ship was targeted by a limpet mine, similar to other incidents this year that have not been confirmed by Ukraine.

The ship is currently secured and under strict control, a spokesperson for the Dakar Port Authority said, confirming “a serious incident in the engine room caused a large amount of water to enter.” The spokesperson added that the exact nature of the incident would be announced in due course.
Source: AFP