Insurers have communicated a surge in “war risk premiums” to the charterers of ships plying in the Black Sea ports of Russia, Reuters reported quoting four traders.

War risk premiums are additional payments levied by the insurance companies apart from the common insurance costs for tankers following Russia’s “military operations” in Ukraine. 

The traders cited that the war risk premium was raised to nearly 1.20-1.25% of the cargo’s price from the prior figure of 1%.

With the rise in war risk premiums, every voyage of the cargo will be priced at $200,000 for each Suezmax tanker more on transporting Russian oil to India. 

A Suezmax tanker can carry 120,000t to 200,000t of cargo. 

Furthermore, this increase would take the total cost of the premium to approximately $1m.

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Even though the figures are not enormous, they will add to the overall oil export expenditures of Russia, the publication added.

Russian companies have paid insurance shipping and freight costs of nearly $20m for each tanker during the Russian supply and sanctions crisis threshold. These figures amount to over one-third value of each cargo’s price.

The publication quoted a trader as saying: “Volumes originated from Russia are associated with higher risks than others, though the current situation gives insurers lots of reason to raise prices for anyone operating in Russian Black Sea ports.”

The latest development comes after Ukraine neared an agreement with global insurers to offer coverage for grain ships travelling to and from its Black Sea ports.