War Risk Surcharge on Middle East Cargo: 2026 Update

War risk surcharges on Middle East cargo have evolved in 2026. Here's what shippers and insurers need to know.

The Current Environment

Geopolitical tensions continue to affect cargo moving through the Red Sea, Persian Gulf, and Arabian Sea. War risk premiums reflect these realities.

Surcharge Levels (2026)

• Red Sea passages: 0.50% to 1.50% depending on vessel flag and cargo type
• Persian Gulf (Hormuz Strait): 0.25% to 0.75%
• General Arabian Sea: 0.10% to 0.50%

Factors Affecting Surcharges

• Vessel nationality and flag state
• Cargo classification (hazardous goods attract higher premiums)
• Route choice (some routes carry higher risk)
• Insurance market appetite for Middle East exposure
• Recent incident activity in the region

Practical Implications

For Shippers

• Budget additional war risk costs when quoting Middle East shipments
• Consider alternative routes if economically viable
• Negotiate war risk clauses with freight forwarders

For Insurers

• War risk underwriting requires specialized expertise
• Carriers may purchase war risk hull coverage separately
• Reinsurance capacity remains tight for Middle East exposure

Looking Ahead

War risk surcharges are likely to remain elevated throughout 2026 as long as geopolitical tensions persist. Shippers should factor these costs into their margin calculations and supply chain strategies.