By Pete Harrison, Reuters
LONDON - The cost of unloading bulk cargoes in the Middle East may jump by as much as $125,000 next week given war-risk surcharges quoted by London underwriters, ship managers said on Tuesday.
"It's looking very, very expensive," said one Mediterranean manager. "We're hearing of additional premiums quoted at 0.5% of the ship's value for a seven-day turnaround in the Middle East Gulf and 0.2% for the Red Sea."
London brokers said that would equate to $125,000 in the Gulf or $50,000 in the Red Sea for a new Panamax ship (55-80,000 tons).
Grain freight costs to the Middle East Gulf from Australia are currently at $6,250 a day.
"There will be an increase and in some cases this will be significant," Rupert Atkin, chairman of Lloyd's War-Risk Committee, told Reuters, commenting on risk rates generally.
"In my opinion transiting the Red Sea ought to be a softer problem than calling in Iraq," he added.
A London-based ship owner said: "Everything will be passed on to the shippers, charterers or receivers."
Ship managers said Lloyd's gave notice on Monday that all existing war-risk surcharges would be void from midnight on September 26.
An existing across-the-board war-risk premium of 0.01% of a ship's insured value would be quadrupled, but that would be dwarfed by the additional premiums charged for voyages to a long list of countries in the Middle East and the Eastern Mediterranean.
Underwriters were quoting indications of additional premiums this week, but ship managers said these could not be locked in until 48 hours before the September 26 deadline.
Managers said the list of countries subject to the surcharge included all of the Middle East Gulf north of latitude 24 (just north of Muscat), as well as Israel, Oman, Lebanon, Libya, Eritrea, Somalia, Yemen, Pakistan, Syria, Algeria, Egypt, the Gulf of Aden and the Red Sea.
Tanker managers said they faced a similar but worse scenario.
"Underwriters are in limbo at the moment, but we've had some very high figures quoted to us today --1% of the insured value of the ship, which could mean nearly $1 million on a single voyage," said one.