Top ship insurers are now refusing to provide war cargo insurance for Saudi Arabia-linked vessels in the Red Sea, following recent attacks by Houthi rebels. This move escalates risks for oil exports from the region, as the Red Sea and its port of Yanbu are crucial for Saudi crude movement to the East via pipeline.

Several leading marine war insurers at Lloyd’s of London have informed brokers they will exclude ships with any “Saudi touchpoints,” including those flying other flags but having previously called at Saudi ports. Some insurers are also preparing to cancel existing policies for certain Saudi-linked vessels. Underwriters Ascot and Navium indicated they were preparing to cancel policies for some Saudi-linked tonnage after an attack on two oil tankers.

According to Marsh broker Marcus Baker, Saudi Arabia may be entering a similar risk category as Israel, the US, and the UK in the Red Sea. This follows a Houthi warning that vessels calling at Saudi ports could be targeted. Two Saudi-flagged tankers, the Encelia and Layla, were attacked, and some ships carrying Saudi cargoes have rerouted or turned off GPS signals to transit the Bab al-Mandab Strait. It remains unclear when insurance coverage will become more widely available for Saudi-linked vessels, dependent on the Houthis ceasing their threats.