The escalating conflict in Gaza has led to a tenfold increase in war risk premiums for ships bound for Israel, prompting industry stakeholders to seek government assistance in ensuring the continued arrival of essential goods.
Following deadly attacks by Hamas supporters in Israeli cities, Israel retaliated with air strikes and a military offensive in the region, raising concerns about a potential wider regional conflict.
Israel, heavily reliant on seaborne trade, has announced plans to compensate ships damaged in the conflict. However, industry executives express concerns about the adequacy of this compensation. Israeli waters are deemed high-risk by marine insurers, resulting in a significant increase in war risk premiums for vessels, leading to higher freight expenses.
Despite the finance ministry not currently considering subsidizing the additional war risk premiums, Uzi Itzhaki of the Israel Port Company is confident that government officials will take necessary actions to protect commerce, including covering risk premiums. While Israeli ports have not been attacked, concerns about the security of Israeli waters are mounting, leading to a shift in shipping routes and heightened precautions.
Notably, the Marshall Islands register upgraded the safety level for Israeli waters to the maximum level, potentially dissuading port visits. Additionally, crude oil tankers heading for Ashkelon were redirected to Haifa and Eilat due to worries about Israeli waters. While Haifa is more convenient in proximity to the nation's refineries, Eilat is considered more secure.
The evolving situation in the region has led to increased concerns about the safety and viability of shipping to Israel, prompting industry stakeholders to seek government intervention to mitigate the impact of the conflict on maritime trade.
Source: Marine Insight