The threat remains “highly likely” of more attacks by Iran on commercial shipping in the Strait of Hormuz according to the world’s largest war risk insurer, the Norwegian Shipowners’ Mutual War Risks Insurance Association (DNK).
Speaking at breakfast seminar held by Wilhelmsen Ship Management (WSM) in Singapore on Friday, Lars Benjamin Vold, senior intelligence & exercise advisor for DNK, said that with US sanctions still in place against Iran the country would remain under pressure and it needed to do something to respond. “We think it’s highly likely that they will continue to perform asymmetric attacks, similar attacks to those we’ve at Fujairah anchorage, or Front Altair and the Kokuka Courageous.”
On 12 May four tankers were hit by what were believed to explosions from limpet mines while at anchorage in the port of Fujairah, and on 13 June the tankers Front Altair and Kokuka Courageous suffered explosions while underway in the Strait of Hormuz which were also believed to have been caused by limpet mines.
“Asymmetric attacks provide them [the Iranians] with plausible deniability, they can say ‘Ok this wasn’t us’.”
DNK member vessels Andrea Victory and the Front Altair were involved in the two previous set of attacks.
In terms of the threat level it was seen as highest for oil and gas related vessels. Vold explained: “We believe there is a high threat in this area towards oil and gas related assets, and we believe it’s a moderate threat to other types of tonnage. And we believe it’s a moderate threat to all types of tonnage off Oman, Qatar and Kuwait.”
In some good news though DNK does not believe a full scale military conflict in the area between the US and Iran is likely.
Vold also flagged a potential cyber risk in the area with Control Risks, which provides DNK’s cyber risk assessment, assessing the cyber threat as high especially in regards of GPS jamming and spoofing. There is also a moderate threat when it comes to other types of cyber attacks.
In terms of the financial impact on the industry DNK ceo Svein Ringbakken explained that war risks insurance rates for ships operating in the area had increased ten-fold since the attacks. Oil tankers transiting the area can pay up to $300,000 – 400 000 in war risks insurance premium to transit the Strait of Hormuz and operate in the area.
For the war risk market Vold said: “We believe the recent cumulative losses for the war risks insurance market in the Middle East/Gulf region have exceeded $100m with a margin”.
DNK insures more than 3 000 ships against the risks of war and they are insured for more than $217bn. It insurers 30 – 40 vessels operating in the Middle East Gulf region at any given time.