War risk premiums for southern Red Sea voyages double; rates for some Saudi linked ships reach 3 percent of vessel value

The cost of insuring cargo through the southern Red Sea doubled for some companies on Thursday, 23 July 2026. According to Reuters, indicative war risk premiums for voyages on the route rose above 1 percent of a vessel's value on Thursday, against about 0.75 percent on Tuesday, 21 July, and 0.3 percent in the week before the Houthis declared a naval blockade.

The report says that for a number of shipping companies calling at Saudi ports, and for Saudi linked ships, rates were quoted as high as 3 percent for voyages from southern Saudi Red Sea ports such as Jizan and Al Shuqaiq and for transits through Bab el-Mandeb. Rates for Saudi Arabia's more northerly Red Sea ports, such as Jeddah and Yanbu, were quoted at around 0.1 percent. The jump followed the Houthis' statement that they had struck two Saudi tankers, the Encelia and the Layla; maritime security sources confirmed the strike on the Encelia off Jizan.

Hamish Kinnear, principal Middle East and North Africa analyst at Verisk Maplecroft, said the successful passage of a China owned tanker through Bab el-Mandeb suggests the blockade is aimed at Saudi and Western linked vessels. For Iran's market, risk stacking at both the Hormuz and Bab el-Mandeb chokepoints keeps the risk premium in global oil prices elevated.