Global shipping costs have begun to rise following the Israel–US strikes on Iran, as Iranian authorities closed the Strait of Hormuz to ships carrying trade to Asia.
Officials warn that **Sri Lanka’s import and export sector is likely to feel the impact, as higher insurance costs and route diversions are causing delays and increasing shipping expenses, according to the Essential Food Commodities Importers and Traders Association.
A spokesperson for the association said shipping costs have already begun to rise slightly because insurers are withdrawing coverage amid the ongoing conflict, while many vessels are being delayed due to route changes.
Major marine insurers including Gard, Skuld, NorthStandard, The London P&I Club, and American Club have announced that the cancellation of war-risk cover will take effect from March 5.
War-risk insurance is essential for global shipping because it covers losses caused by war and terrorism, which are not included in standard marine, aviation, or property policies. Without adequate insurance, commercial ships cannot operate, as port authorities, charterers, banks and regulators require proper coverage before vessels can sail.
Industry sources say war-risk premiums have surged from about 0.2 percent of a ship’s value last week to as high as 1 percent in the past 48 hours. This means a tanker valued at $100 million could see its insurance cost for a single voyage jump from roughly $200,000 to about $1 million, significantly increasing the cost of transporting goods worldwide.
