As per Reuters, the shipping rates in the black sea have increased by 20% in the year 2023 due to the increase in the premiums of war risk insurance. Now, with this increase, many insurance agents have stopped providing insurance coverage for vessels and aircraft that are transporting goods from Belarus, Russia, and Ukraine. Even the reinsurers are not taking risks and have pulled out of the region. At present, the situation is such that the liners have to pay more for shipping rates.
The unavailability of insurance coverage or reinsurance coverage is causing higher shipping freight rates for Black sea shipping. All the shipments that are moving out or going into Russia are finding the premiums rising by 50% to reveal the cost of capital from not being reinsured. On the other hand, the tanker rates have reduced even though a spike was expected after the EU sanctions on Russian crude went into effect. European refiners ramped up their consumption of Russian crude before December 5 and after that buying spree decreased and died out, eventually minimizing the demand for tankers.