Saudi Arabia considering state-backed insurance program for ships
The plan would aim to provide cheaper cover for vessels transiting the Gulf or Red Sea as a way to keep trade flowing at a time of war.
Saudi Arabia is contemplating the creation of a state-backed insurance program for ships traversing the Gulf and Red Sea, as it seeks to facilitate trade amidst ongoing challenges. The proposed initiative aims to offer more affordable coverage for vessels navigating these waters, with a potential coverage of up to 700 million riyals ($186 million), supplemented by additional support from the Saudi Export-Import Bank.
The report from the Financial Times suggests that other Saudi insurers and international firms may also participate in this endeavor. However, the negotiations are currently in their infancy and may not culminate in an agreement. The strategic importance of shipping routes through the Strait of Hormuz and the Red Sea has been significantly impacted by the ongoing conflict with Iran, which has persisted for six months.
While it is believed that more oil is being exported than initially estimated, the escalating insurance costs and limited coverage are adversely affecting trade flows, particularly in Gulf economies that heavily depend on these waterways to export hydrocarbons and import a diverse range of goods such as cars, machinery, food, and agricultural products.
In response to the Houthi attacks in the Red Sea, Saudi Arabia has been compelled to reroute oil tankers thousands of miles around Africa, as detailed by Bloomberg.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
- Partey begins new chapter in Saudi Arabia with Al Shabab myjoyonline.com
- Tanker traffic at Saudi Arabia's Yanbu port falls by a third, report says middleeasteye.net
- Tanker traffic at Saudi Arabia’s Yanbu port falls by a third, report says hellenicshippingnews.com
