No grain export insurance yet; higher premium for Russian oil tankers

Ukraine is negotiating with international insurers about insuring renewed grain shipments in the western part of the Black Sea. Insurance companies also increased premiums for Russian oil tankers this week.

With the Ukrainian navy launching drone speedboat attacks into Russian ports, the eastern Black Sea is becoming increasingly dangerous. Attacks on Russian Black Sea ports have recently been reported. So far, oil tankers from Russian Black Sea ports have not been affected, but the risks are increasing, according to oil traders.

Kyiv says negotiations on securing new grain shipments across the Black Sea, through the coastal waters of NATO countries Romania, Bulgaria and Turkey, are progressing. Resuming grain shipments is a crucial step after Russia pulled out of a UN-brokered deal last month. 

Ukraine says reinsurance is currently being discussed with local banks and international insurance groups, including Lloyd's of London. Insurers, saddled with billions of dollars in losses, have pushed for some form of risk sharing (read: higher premiums).

Insurance companies have imposed premium increases known as 'war risk premiums' on charterers of oil tankers in the Russian part of the Black Sea. Military actions in the Black Sea region of Russian and Ukrainian Black Sea ports have escalated since the grain export deal fell apart in mid-July.

The premium increase means that each trip will cost an additional $200,000 per tanker and will amount to $1 million.