War risk insurance premiums for shipments to Israel have surged dramatically as the conflict between Israel and Iran continues. Industry sources report that these premiums are now three times higher than just a week ago, reflecting the escalating tensions in the region.
Currently, the cost for a seven-day voyage to Israeli ports ranges from 0.7% to 1.0% of the ship’s value. This is a significant jump from around 0.2% a week earlier. Although these rates have increased, they remain below the peak of over 2% seen in November 2023, which followed a deadly Hamas attack on Israel that resulted in 1,200 casualties and led to an Israeli military response in Gaza.
The rise in premiums adds tens of thousands of dollars in extra costs for each voyage. David Smith, head of marine at the insurance broker McGill and Partners, noted that rates are determined on a case-by-case basis, depending on factors like cargo type, ownership, and the specific port of call.
Israel heavily relies on maritime routes for its imports, with key ports including Ashdod in the south, Haifa in the north, and Eilat on the Red Sea. Despite the increased risk, all port terminals in Haifa are reported to be operating normally.
However, shipping companies are becoming increasingly cautious about sending vessels to Israel due to the heightened risk. The Iran-backed Houthis in Yemen have threatened to attack vessels linked to Israel, despite a ceasefire concerning U.S. and UK ships in the Red Sea. This militia announced a "maritime blockade" on Haifa port in March as a response to the ongoing conflict in Gaza.
In Haifa, nearly 30 vessels, many of which are general cargo ships, are currently anchored in the bay. The situation remains tense, and the shipping industry is closely monitoring developments as the conflict continues.