Saudi Oil Export Costs Surge as Red Sea Risks Mount

AI Summary

Insurance costs have surged for Saudi oil exports through the Red Sea due to heightened war risks, with premiums now nearly matching those for journeys through the Strait of Hormuz. Insurance on vessels calling at Yanbu have tripled, and at southern ports like Jizan can reach up to 7%, significantly increasing the costs for oil cargo shipments.

Saudi Arabia’s workaround for the Strait of Hormuz now carries a war-risk insurance bill nearly as expensive as sending tankers through Hormuz itself. Quoted premiums for Saudi-linked tankers calling at the Red Sea port of Yanbu have tripled to around 3% of a vessel’s value from less than 1% in early July, according to Reuters. At Saudi ports farther south, including Jizan, quoted premiums can reach 7%. Hormuz voyages are running between 6% and 9%. That adds millions of dollars to every cargo. A voyage from Yanbu can carry roughly $3…