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Black Sea war insurance prices jump after tanker attack, sources claim

Five industry sources reported that the cost of war insurance for ships sailing into the Black Sea almost doubled after two Greek-managed tankers were struck by unidentified drones on their way to load crude oil at a terminal on 'Russian coast.

Black Sea is vital for shipping grain, oil and petroleum products. Bulgaria, Georgia and Romania, as well Russia and Ukraine, share its waters.

Sources said that the latest incidents raised concerns about the safety of ships heading to Russian and Ukrainian terminals.

The cost of war insurance for Black Sea terminals has risen from 0.6% to 0.8% in late December to 1%. Early December, rates rose to the highest level since 2023 - after a series drone attacks on Russian tankers.

"Rapid risk escalation with few indicators or warnings has become a trademark of the Black Sea, according to Munro Anderson, marine war insurance specialist at Vessel Protect.

Ships entering Russian or Ukrainian Black Sea terminals or ports around the Sea of Azov need additional war-risk coverage. The policy is typically for a period of seven days, and its terms are reviewed each 24 hours. Last month, policies were reviewed on average every 48 hours.

David Smith, the head of marine at insurance broker McGill and Partners said that Black Sea war rates are extremely volatile and change on a daily basis.

Smith said that "Right Now, they're spiking due to a few incidents. We wouldn't be surprised if we were quoted more than 1% depending on the vessel value, owner or proposed port of call."

The cause of Tuesday's strike, which affected a terminal serving as a loading port for approximately 80% Kazakh oil bound for international markets, was not immediately known. (Reporting and editing by Jan Harvey; Jonathan Saul)

(source: Reuters)