Major insurers have slashed prices for upstream energy insurance outside the Middle East, with premiums falling about a quarter since the start of the year and some cuts as deep as half, as they bet the war in Iran will boost fossil‑fuel production elsewhere.

Allianz, Axa XL and Tokio Marine Kiln are writing policies below their technical break‑even price, according to underwriters, while WTW broker Rupert Mackenzie notes a “massive oversupply” of capital chasing scarce mega‑projects worth $2bn or more. War between the US, Israel and Iran has pushed some projects to buy war‑risk cover, leaving the remaining risks relatively cheaper.

The price war benefits buyers such as Indonesia’s state manager SKK Migas, which renewed its policy for about $12mn a year versus $20mn previously, exposing insurers to large losses for little reward.

Insurers accept short‑term losses, viewing upstream energy as a historically profitable line they want to keep exposure to, especially with a possible “drill, baby drill” push from Donald Trump.