Saudi Oil Exports at Risk as Insurers Pull Red Sea Coverage After Houthi Attacks

Major shipping insurers are refusing to sell war cargo insurance to Saudi-linked vessels in the Red Sea after Houthi attacks on two oil tankers this week. The move threatens a key export route that Saudi Arabia relies on while the Strait of Hormuz remains largely blocked.

Some of the world’s biggest marine war insurers are refusing to cover Saudi Arabia linked ships sailing through the Red Sea, after a fresh wave of attacks by Yemen’s Houthi rebels raised the stakes for oil exports moving through the region. Brokers told the Financial Times that several leading war risk insurers based in the Lloyd’s of London market decided on Friday to stop covering vessels with any connection to Saudi Arabia. That includes ships flying other countries’ flags if they have previously docked at Saudi ports.

It is not just new coverage at risk. The same brokers said some insurers are also moving to cancel policies already in place. Underwriters Ascot and Navium reportedly told brokers that following Wednesday night’s attack, they were preparing to pull coverage for certain Saudi linked ships operating in the Red Sea.

This pipeline route can carry up to 5 million barrels a day. For context, Saudi Arabia’s crude exports before the current conflict stood at roughly 7 million barrels a day, meaning this single corridor now handles the majority of the kingdom’s oil shipments.

The latest strikes suggest Saudi linked vessels are now being viewed through a similar lens, following a Houthi warning issued Monday. The Iran backed group said any ship calling at Saudi ports would be a target anywhere within reach of Yemeni forces.