War risk insurance surges after recent Russian strikes on foreign vessels in Black Sea, Bloomberg reports

War risk insurance premiums for vessels traversing Ukraine’s shipping corridor in the Black Sea have increased by about 33 per cent following Russia’s recent attacks on foreign ships, Bloomberg reported on Oct. 10, citing sources in the market.
According to the insurance market sources, coverage has jumped to above one per cent of the value of a ship, up from around 0.75 per cent last week.
The increase in rates follows Russian strikes on three foreign ships flying the flags of Palau, Saint Kitts and Nevis, and Panama within a four day stretch between Oct. 6-9.
The Saint Kitts and Nevis vessel attacked on Oct. 6 was loaded with about 6,000 tons of Ukrainian corn intended for export. While on Oct. 7, five foreign nationals were injured and one port employee was killed in the attack on the Palau-flagged boat. No details were provided as to what the second vessel was carrying.
A Russian missile strike on Odesa Oblast on Oct. 9 also hit a Panama-flagged civilian cargo ship containing 45 containers of packaged sunflower oil to be sent as humanitarian aid to Palestine, Ukraine’s Agriculture Ministry said on Oct. 10.
Under the increased premiums, a ship valued at $50 million would see an increase of $125,000 per voyage.
Increased instability in the Black Sea has lead to wheat futures in Chicago rising 2.5 per cent thus far this week, Bloomberg reported.
Traveling along the route, Ukrainian ships are regularly at risk of being attacked by Russia. Since the beginning of the all-out war, mines have also been drifting along the trade route, which also poses a risk to maritime transport.
Kyiv was forced to set up a new export route in the Black Sea last year after Russia unilaterally terminated the Black Sea grain deal. Initially envisioned as a humanitarian corridor to allow the departure of ships stranded there since the start of the full-scale war, it has since grown into a full-blown trade route.