A wave of clandestine attacks on commercial oil tankers and a tightening regulatory grip on Russia’s so-called “shadow fleet” is roiling global maritime insurance markets, exposing shipowners and underwriters alike to shifting geopolitical and financial hazards.
In recent months, five tankers have suffered unexplained explosions, many believed to involve limpet mines - an increasingly common weapon in asymmetric maritime warfare. The most recent strike, which flooded the engine room of the Vilamoura, occurred last week off the Libyan coast. Four earlier incidents took place in January and February, targeting vessels in the Mediterranean and Baltic seas.
While no group has claimed responsibility, all the damaged ships had docked at Russian ports in the weeks preceding their attacks. Ukrainian military intelligence has described the Vilamoura as part of Russia’s “shadow fleet,” suggesting the vessel may have been targeted for covert retribution. Kyiv, however, has neither confirmed nor denied involvement.
The attacks have unsettled shipping markets and raised the alarm among maritime security analysts, who warn that the range of possible perpetrators may extend beyond Ukraine.
“There remains a range of alternative possibilities,” Martin Kelly, head of advisory at EOS Risk Group told the Financial Times, pointing to potential involvement by Libyan factions or other state actors.
Despite the mystery surrounding the blasts, one fact is indisputable: insurance risk profiles in multiple regions are deteriorating fast - and so is coverage.
Germany has moved decisively against Russia’s shadow fleet, following Sweden by introducing new maritime insurance compliance checks in the Baltic and North Seas. Beginning July 1, all tankers transiting German waters east of Fehmarn must now present proof of pollution liability coverage.
The requirement - developed in coordination with Sweden - seeks to pressure a class of vessels notorious for obfuscating their ownership, operating under flags of convenience, and often skirting traditional underwriting channels.
The clampdown is part of a wider Western strategy to enforce sanctions and reduce environmental risk. According to the European Union, more than 340 vessels are already designated under existing sanctions frameworks. Germany’s Federal Transport Minister, Patrick Schnieder, called for “increased vigilance” and affirmed plans for deeper cross-border cooperation.
The measures are more than symbolic. Earlier this year, Germany seized the Eventin, a Panama-flagged tanker suspected of violating sanctions. Its cargo of crude oil was confiscated, signaling a new era of active enforcement.
For underwriters, the crackdown presents a dual challenge: enhanced regulatory scrutiny and increasing uncertainty around vessel insurability.
Meanwhile, in the Middle East - where insurance markets are already strained by regional conflict - carriers have begun retreating altogether. A growing list of marine insurers have pulled war risk coverage for vessels linked to the United States, United Kingdom, or Israel. Carriers are declining coverage outright, regardless of price.
“The ability to obtain coverage remains, but pricing and terms are shifting by the hour,” said Marcus Baker, global head of marine, cargo and logistics at Marsh.
Premiums for war risk have more than tripled since early spring, especially for American-affiliated vessels. Some quotes now exceed 0.5% of hull value, a level not seen since the early days of the Ukraine war.
Terms are tightening too. Coverage notification periods have been slashed from 48 to 24 hours, adding pressure to brokers and shipowners navigating an increasingly volatile threat environment.
The industry’s anxiety is compounded by geopolitical flashpoints like the Strait of Hormuz, where nearly 20% of global oil supply passes. A tentative ceasefire between Israel and Iran has done little to ease nerves, and there is still a “realistic possibility” of renewed hostilities, according to private security firms.
For the insurance industry, the convergence of tanker sabotage, regulatory crackdowns, and shrinking war risk capacity has ushered in a new era of uncertainty.
On one hand, governments are demanding greater transparency and stricter compliance. On the other, insurers are exiting high-risk markets, recalibrating premiums, and reining in policy terms.
The stakes are high. A single uninsured loss could expose owners and operators to catastrophic liabilities - especially if environmental damage is involved. At the same time, reinsurers are increasingly wary of covering the sector at all.
“There’s no clear direction right now,” said Lloyd’s List editor David Osler. “The mood in the market is best described as anxious - and fluid.”
For shipowners, brokers, and insurers alike, the global maritime arena is no longer just a matter of trade routes and tonnage. It is now a high-stakes puzzle of geopolitics, enforcement, and risk tolerance - with insurance caught squarely in the crossfire.
