Ongoing geopolitical conflicts continue to impact the global marine market

Tensions in the Red Sea, Gulf of Aden, and the Strait of Hormuz continue to escalate and affect safe passage planning, whether vessels and cargo such as crude oil can go into and out of Iran, and the cover that marine insurers can provide. 

Houthi threat to the security of international commerce

Following the armed conflict between Israel and Hamas in Gaza which began on 7 October 2023, the Houthis, a Yemini armed group that receives financial and military support from Iran, have sought to support Hamas by targeting Israeli-linked shipping in the Bab al-Mandab Strait and across the Red Sea.

Since November 2023 the Houthis have launched multiple anti-ship ballistic missiles and drone boat attacks in the Red Sea from military sites in Yemen using Iranian-supplied weaponry, in an attempt to exert economic pressure and bring an end to the conflict in Gaza. The Houthis claim that their legitimate targets are vessels connected with Israel, the US, and the UK. However, often complicated and opaque ownership and management arrangements leave vessels open to mistaken identity attacks.

Attacks on shipping

On 19 November 2023, the Houthi’s hijacked the roll-on/roll-off car carrier Galaxy Leader as a direct result of the conflict in Gaza. She remains at Hodeidah anchorage, Yemen, with her 25 crew still on-board being held captive.

On 18 February 2024, the general bulker vessel Rubymar was struck by two Houthi-launched missiles whilst transiting the Bab al-Mandeb strait in the Red Sea because of its alleged links to UK interests. The 20 crew members onboard were safely evacuated. The abandoned vessel, however was crippled by the strike, and sunk on 1 March 2024. Efforts to salvage the ship were unsuccessful given her proximity to territory controlled by the Houthis. She leaked significant amounts of fuel oil into the sea, causing environmental concerns. Her cargo of dangerous fertilizer has further heightened the threat of an environmental disaster as she presents a subsurface impact risk to other vessels.

On 4 March 2024, the box-container ship MSC Sky II was struck by a Houthi missile and the Indian Navy’s assistance was required to extinguish a fire on board.

On 6 March 2024, the bulk carrier True Confidence was hit by a Houthi anti-ship ballistic missile in the Gulf of Aden causing significant damage to the bridge and accommodation, and killing three crew members. Three other crew members were critically injured. The strike marked the first (and hopefully the last) deaths caused by the militant’s attacks on merchant shipping in the Red Sea.

Despite the attack and loss of life having been widely condemned, the Houthis have continued to defy the international outcry by escalating their continued attacks.

Since December 2023, under the auspices of Operation Prosperity Guardian - an international maritime coalition involving the US, UK, and Denmark and others - naval warships have been deployed to repel the Houthi missiles and drones in an attempt to protect the key waterway and support freedom of navigation. So far, however, the Houthis have not yet been deterred.

War risk premiums

As a result of the ongoing conflict, marine war risk additional premiums for vessels transiting the Red Sea or the Gulf of Aden have been affected considerably.

By February 2024, rates were reportedly up 1,500% to between 0.75% - 1% of hull values, vastly in excess of those seen at the height of Somali piracy between 2008 and 2014. Chinese vessels which are not a target of the Houthis however, are the exception, and can take advantage of rates at 0.5% or lower.

With the rates having steadily increased since the Houthi’s started deploying missiles and drones into the key international merchant shipping lane in November 2023, the heightened risk has led to certain reinsurers pulling cover and P&I clubs having to issue corresponding Notices of Cancellation for non-mutual business that had a war risk extension. Cover in most cases was shortly reinstated.

Impact of alternative routing

As billions of pounds worth of cargo is rerouted around the Cape of Good Hope, increasing the transit time for container movement on the Asia-Europe route, the scale and disruption caused by the Houthis in the Red Sea to supply chains will have a lasting impact on those depending upon safe and secure maritime transport.

In the UK, manufacturers and exporters will need to grapple with soaring shipping rates and substantial costs increases due to logistical delays, increased costs of container hire, fuel, insurance, and labour, as the ports become congested and subject to equipment shortages.

Generally speaking, shipowners and charterers have been working together to surmount the difficulties presented by the uniquely challenging situation created by the Houthi attacks in order to get cargo to its destination as quickly and cost-effectively as possible without delay.  

Iranian vessel seizures

In addition to the Houthi aggression in the Red Sea, tensions in the Strait of Hormuz between the US and Iran have not abated. In 2023 we commented on the implications for insurers arising out of seizures in the Straits of Hormuz.

On 11 January 2024, the Iranian Navy confirmed that it had hijacked and seized the suezmax tanker ST NIKOLAS, formerly known as the SUEZ RAJAN, whilst laden with 145,000MT of crude oil and transiting the Gulf of Oman from Basrah in Iraq, to Aliaga in Turkey, as a ‘tit-for-tat’ response to the vessel’s involvement in the US’s seizure of Iranian crude oil in 2023.

On 6 March 2024, the Iranian Navy ordered that the ADVANTAGE SWEET, another suezmax tanker seized by the IRCGC on 27 April 2023, prepare for the discharge the crude oil on board to an Iranian owned VLCC (Very Large Crude Carrier). It is not clear what the vessel or cargo’s ultimate fate will be, but the recent Iranian actions are unlikely to de-escalate the already heightened tensions between Washington and Tehran in the short to medium term.


The ongoing conflicts have already had a significant impact on the maritime sector, global supply chains, and its insurers and will continue to do so until the scale of the conflict reduces dramatically. Whilst the response has been strong and the majority of attacks have been foiled, the recent strikes have demonstrated the escalated risk to shipping.

On 17 January 2024, the Supreme Court handed down judgment in the MT POLAR, rejecting cargo interests’ appeal holding that they were liable in general average (GA) to contribute cargo’s proportion of US$7.7m paid by the owners of the MT Polar as a ransom to release the vessel and fuel oil cargo onboard after it was seized by Somali pirates in 2010. The judgment is relevant to commercial vessels considering operating in the Red Sea or Gulf of Aden as it may preclude shipowners from refusing to sail through the troubled area where risks of attack by the Houthis or Somali piracy are known at the time of contracting, and the charterparty stipulates for a passage through the region.

There remains hope that resolution to the crisis in the Middle East could be achievable in the coming months, although the conflict has already continued beyond initial expectations, highlighting the unpredictability of the situation. 


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