The insurance costs for oil tankers crossing the Black Sea have increased by over 12 times in recent months, amid attacks on commercial vessels and port infrastructure.
An insurance policy that used to cost around $200,000 has now reached $2.5 million for a single ship. The rise in oil transportation costs also puts pressure on fuel prices, including in Romania.
The data was presented by Evgeni Simeonov, Lukoil's special commercial manager in Bulgaria, in an interview on Bulgarian national television, according to e-nergia.ro.
The increase is 12.5 times, meaning an additional cost of around $2.3 million for each ship, explained Simeonov.
Insurance Costs Started Rising Before the Recent Attacks
Since September, marine insurers in London have included the entire Black Sea on the list of high-risk areas. This means that ships transiting the region must notify their voyages, except those sailing in the territorial waters of the riparian states, including Romania, Bulgaria, Georgia, and Turkey.
According to Reuters, additional insurance for the risk of war was already increasing the cost of a seven-day maritime journey by hundreds of thousands of dollars.
The situation worsened after repeated attacks on commercial vessels in the Black Sea. On October 6, two ships were hit by drones in Bulgaria's exclusive economic zone. The Alfa Watan vessel, flying the Togo flag, sank, while the Able ship, under the Palau flag, was damaged.
Another incident occurred on Tuesday, October 13, near the Bulgarian coast. Two commercial ships were attacked by drones, and one of them, AZOV CONCORD, which had departed from the port of Brăila and was heading to Turkey, sank. The other ship was damaged, and Bulgarian authorities intervened to rescue the crews.
The costs of oil transportation had already surged before these incidents. Bloomberg reported in August that the daily reference rate for tankers on the Novorossiysk-Augusta route had reached a record level of $440,948, following a 140% increase since the beginning of July.
Implications for Fuel Prices in Romania
The rise in transportation and insurance costs also affects the Romanian market, where some of the imported oil and petroleum products arrive by sea.
Frames company consultants estimated that insurance for goods transported through the Black Sea, which usually accounted for between 0.2% and 0.5% of the cargo value, has now reached 1-2%.
At a price of over $1,600 per ton of diesel, the increased insurance would mean an additional cost of around $13-29 per ton.
Based on approximately 1,200 liters of diesel per ton, the company calculated an additional cost of 5-12 cents per liter before VAT and 6-15 cents after tax.
"It may seem little, but it is just the first link. Insurance is added to higher freight rates demanded by shipowners still accepting voyages, detours on longer and safer routes, and delays in supplies. All together add up to the pump price in a market that was already under pressure," explained Frames representatives, as cited by e-nergia.ro.