Middle East Conflict Spurs 60% Surge War Premiums, Tanker Rates in Persian Gulf

The ongoing Israel-Iran conflict has significantly increased insurance costs, shipping rates, and war risk premiums for oil tankers navigating the Strait of Hormuz, a critical chokepoint for global energy supplies. War risk premiums for tanker insurance have surged by around 60%, reflecting underwriters' concerns over potential escalation and disruptions in the Gulf's shipping lanes. Tanker chartering rates across key routes such as the Middle East Gulf to Singapore and Japan have sharply increased, with supertanker rates rising by up to 30%, as vessel owners and crews grow cautious amid heightened electronic interference and regional instability. Despite no direct attacks on ships yet, reports of erratic signals and electronic interference in the Gulf waters have raised alarms, prompting advisories for vessels to transit cautiously. Asian buyers are shifting demand to oil grades loaded outside the Persian Gulf, including from the Indian Ocean side, as a risk mitigation measure. Analysts warn that any closure or disruption of the Strait of Hormuz could push oil prices above $120 per barrel and potentially necessitate U.S. military involvement to secure energy flows.