London’s marine insurance market has added Libya to a list of areas deemed high risk as violence escalates in Africa’s third-largest oil producer, a senior market official said on Friday.
Libyan rebels vowing “victory or death” advanced towards the major oil terminal of Ras Lanuf on Friday, calling for foreign air strikes to set up a “no-fly” zone after three days of attacks by Muammar Gaddafi’s warplanes.
“The emerging risk had reached a level where as a matter of prudence insurers will require notification from vessels calling to Libyan ports or waters,” said Neil Roberts, a senior technical executive with the Lloyd’s Market Association (LMA), which represents the interests of all underwriting businesses in the Lloyd’s market.
“On the issue of pricing, that’s a matter for individual negotiation on a voyage-by-voyage basis. It’s likely that things will change on a day-to-day basis,” he told Reuters.
Overseas Shipholding Group, the world’s No. 2 independent tanker company, told Reuters this week that some tanker rates had tripled as owners jack up rates and port operators struggle to load crude due to the uprising.
The Joint War Committee, which groups syndicate members from the LMA as well as representatives from the London insurance company market, added Libya to a list of areas it considered high risk for merchant vessels and prone to war, strikes, terrorism and related perils on Thursday. Other countries on the list include Iran, Pakistan, Ivory Coast, Somalia and Yemen.
The London marine insurance market plays an influential role in the global marine insurance industry.
“With reports of air strikes, if things go off target or even if ships are targeted deliberately, then underwriters will have quite serious concerns about their exposure on any vessels there or trying to call there,” Roberts said.
“It’s a reactive list, so if things improve to a point where underwriters are comfortable, then certainly Libya will come off,” he added.
(Editing by Jane Baird)
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