Marine Insurers Warn Elevated Risk Persists in the Gulf Despite Recent Developments

The last-minute ceasefire agreed by the US and Iran, has been met with cautious relief, but the situation will remain critical for months.

Marine insurers have expressed early relief at the announcement of the ceasefire agreed by Donald Trump and the Iranian regime just a few minutes before the US President’s deadline was due. But they have also warned that it will be a long way back to normal trade for ships operating across the region.

Speaking for the Lloyd’s Market Association earlier today, Head of Marine and Aviation, Neil Roberts welcomed the ceasefire and pledged continuing support for clients. But he warned that only time would tell whether the ceasefire proves to be a pause, or a peace.

“In the meantime, it is highly unlikely that trade into the Gulf will simply resume,” he declared. “The region remains at heightened risk with none of the underlying tensions resolved.”

Losses already advised would be dealt with as normal, he said, adding that ships previously unable to leave are now expected to do so as soon as their owners and shipmasters deem that it is safe to do so.

His comments were broadly in line with those of Bimco’s Chief Safety & Security Officer, Jakob Larsen, who warned against a mass exodus.

“If too many ships attempt to transit at one, due to the confined nature of the Strait of Hormuz, there is a heightened risk of navigational hazards like grounding or collisions,” he said.

He added that navies are not expected to escort commercial ships, at least in the short term.

“There is too much uncertainty regarding the practical implementation of the ceasefire, and any setback in negotiations could lead to a resumption in hostilities,” he warned. “In that case warships in the Strait of Hormuz would be quite vulnerable to Iranian attack.”

However, he said that at a later stage and assuming the ceasefire holds, naval escorts could become an option and help to provide seafarers with a level of assurance whilst transiting the Strait to the waters of the Gulf of Aden.

By: Seatrade Maritime