The cost of insuring ships in the Black Sea has doubled after Russian attacks on ports and ships in Ukraine

The cost of war risk insurance for ships heading to the Black Sea has almost doubled after an attack by unidentified drones on Greek oil tankers heading to a terminal in the Russian Federation to load crude oil, Reuters reports, citing its own sources.

Recent incidents have raised the risk assessment for vessels heading to both Ukrainian and Russian terminals.

Following a series of attacks on tankers linked to the Russian Federation, the cost of military risk insurance for entry into Black Sea terminals rose from 0.6% to 0.8% of the vessel's value at the end of December to 1%, the highest level since 2023.

Vessels calling at Russian or Ukrainian Black Sea ports or terminals in the Sea of Azov require additional war risk insurance, which is usually taken out for seven days and the terms of the insurance are usually reviewed every 24 hours. Last month, however, the policies were reviewed every 48 hours.

According to insurance broker McGill and Partners, war risk insurance rates in the Black Sea have been extremely volatile and changed daily, and now they have risen sharply due to a series of incidents, and can even exceed 1% of the value of the vessel depending on the ownership or the intended port of call.

The increase in the cost of insurance increases the cost of freight and reduces the purchase prices of traders in ports.