War risk underwriters are deliberating whether to charge tonnage with Israeli links a higher rate following the attack on a tanker off Oman earlier this week.
Ships trading to high-risk additional premium areas, such as the coast of Oman close to where the attack on the 49,000-dwt Mercer Street (built 2013) took place, would be normally paying higher rates.
But, amid rising tensions in the region, and following a series of attacks by Israel and Iran on ships, some underwriters said they are reviewing their exposure tonnage with links to Israel.
“I would certainly be wary of any tonnage with an explicit link to Israel given that ships linked to that country could be specifically targeted," commented one underwriter.
There appears to be a split in pricing developing in the war risk market. Those underwriters covering ships that are trading regularly in the region have already priced the current risk into premium.
Underwriters that are providing war risk cover on a spot basis are seeking to hike rates on the back of recent events, including the hijacking of the 9,700-dwt Asphalt Princess (built 1976).
Wide off the mark
There is some suggestion that the threat in the region goes beyond Israeli-linked tonnage. Underwriters point out that non-related ships have been dragged into the conflict as Iran's targeting has sometimes been wide off the mark.
The alleged Iranian-backed attack on the 8,704-teu CSAV Tyndall (built 2014) in July happened four months after the vessel had been sold by Israeli interests.
Owners with links to Israeli operators will be reviewing their risk.
The Mercer Street is owned by Taihei Kaiun, which is based in Japan’s Imabari prefecture on the south east island of Shikoku. The company has a fleet of 10 tankers and two capesize bulk carriers valued at $415.39m, according to VesselsValue.
Taihei Kaiun also has strong links to the Ofer family group of companies. The Mercer Street was chartered out to Zodiac Maritime, which has full commercial control and technical management of the vessel.
According to VesselsValue a further eight tankers owned by Taihei Kaiun are chartered out to Singapore-based Eastern Pacific under similar arrangements.
The Mercer Street is the second Japanese-owned ship to be caught up in Middle East political hostilities. The 27,000-dwt tanker Kokuka Courageous (built 2010), owned by Kokuka Sangyo, was hit by a missile in the Gulf of Oman in June 2019.
