Expansion of Black Sea war-risk zone could raise insurance and freight costs

The Joint War Committee (JWC) has expanded its list of higher-risk areas to cover almost the entire Black Sea. The updated JWLA-035 list is dated September 16, while the new conditions may start to apply from September 19, according to market participants.

The Listed Areas are expected to cover almost all of the Black Sea, excluding the territorial waters of Turkey, Georgia, Bulgaria and Romania. Shipowners are already receiving relevant notices from P&I clubs.

Inclusion in the list does not mean a ban on shipping, but insurers may require separate war-risk cover and an additional premium for voyages through these areas.

The size of the additional premium will be determined individually depending on the vessel, route, insurer and current risk assessment. Market participants expect this could raise the cost of insuring Black Sea voyages.

For Ukrainian agricultural exports, the wider risk zone could add pressure to logistics costs and freight rates, particularly on routes to the Greater Odesa ports.

Tags: insurance, freight costs, war risk, Black Sea, logistics