Tanker Insurance Costs in the Black Sea Reach $2.5 Million

Insurance costs for each oil-laden ship in the Black Sea have risen in recent months from about $200,000 to $2.5 million, an increase that has raised crude oil transport costs and pressure on fuel prices in Bulgaria.

The insurance cost of each oil-carrying ship in the Black Sea has increased from about 200 thousand dollars to 2.5 million dollars in recent months; An increase that has increased the cost of transporting crude oil and pressure on the price of fuel in Bulgaria.

Ambassador Arjan-International Group: Yevgeny Simeonov, Lukoil's special commercial manager in Bulgaria, told the country's national television on Monday that the increase reflects the growing risks to commercial shipping following frequent attacks on ships and port infrastructure.

These figures represent a 12.5-fold increase in the declared cost of insurance, which, according to Simeonov, is equivalent to an additional cost of $2.3 million per ship.

Earlier in September, the London-based marine insurance market expanded the reporting requirements for high-risk areas in the Black Sea to cover the entire Black Sea basin. However, cruises within the territorial waters of neighboring countries – including Bulgaria, Romania, Georgia and Turkey – are still exempt from these reporting requirements. Ambassador Arjan reported that the war risk surcharge adds hundreds of thousands of dollars to shipping costs for seven-day voyages.

This threat has now been extended to the exclusive economic zone of Bulgaria. Drones attacked two commercial ships on October 6, sinking the Togo-flagged Alfa Watan and damaging the Palau-flagged Able. According to the Associated Press report, all 18 crew members of the "Ebel" were saved.

Bulgarian authorities have not yet identified the perpetrators of these attacks. The sinking of the ship prompted Syria to demand an independent investigation, as 10 crew members - including nine Syrian nationals - were missing.

Shipping costs were also rising before the October attacks. Bloomberg reported in August that benchmark daily earnings for tankers on the Novorossiysk-Augusta route — based on crude oil shipments of 135,000 tons — reached a record $440,948. This figure had increased by 140% since the beginning of July.

Burgas refinery in Bulgaria continues to receive crude oil shipments. Simeonov stated that the facility has not experienced any cargo cancellations and has secured its oil supply until early December. He also defended Bulgaria's decision to lift diesel export restrictions, arguing that preventing the refinery from selling its surplus production on foreign markets might force it to reduce crude oil refining as storage tanks fill up.

According to the Oil Price report, Simeonov stated that the amount of diesel produced in this refinery exceeds the domestic consumption of Bulgaria, and as a result, imposing restrictions on the export of diesel can lead to a decrease in the production of gasoline, jet fuel and other petroleum products.

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