According to Reuters, the insurance cost of shipping goods through the Red Sea has more than doubled in recent days after Yemen's Houthis attacked and sank two ships, killing at least four seafarers after months of calm.  War risk premiums have risen to around 0.7% of the value of a ship, from around 0.3% before the latest attacks took place, with some underwriters pausing cover for some voyages.

The Red Sea is a critical waterway for oil and commodities but traffic has dropped sharply since Houthi attacks off Yemen's coast began in November 2023.

Rates for a typical seven-day voyage period, which are set by individual underwriters, have been quoted in the week of July 7th at up to 1%, matching the peak level in 2024 when there were daily attacks. This adds hundreds of thousands of dollars in further costs for every shipment.

"The recent attacks in the Red Sea have highlighted the need for caution when considering a transit," said Neil Roberts, head of marine and aviation with the Lloyd's Market Association, which represents the interests of all underwriting businesses in Lloyd's of London.

A Houthi attack on the Greek ship Eternity C on Wednesday July 9th killed four of the 25 people aboard, maritime officials said. On Thursday, rescuers pulled four more survivors from the Red Sea. Houthi militants said they were holding some of the crew still missing. The attack followed the sinking of another Greek-operated vessel on Monday, which the Houthis claimed responsibility for. Some of their sister vessels had made calls to Israeli ports in the past year, an analysis of shipping data showed.

The Houthis attacked more than 100 ships from November 2023 to December 2024. In May, the U.S. announced a deal to stop bombing the Houthis in return for an end to shipping attacks, though the Houthis said the deal did not include sparing Israel.

Insurance industry sources said underwriters would try to avoid covering any vessel with links with Israel, even if it was indirect.

The situation of war in the Red Sea impacts not only the oil and commodities ships, but also vessels for subsea cable installation and repair.

The Red Sea is a critical subsea cable corridor in the world, there are around 20 subsea cables running through the Red Sea. The installation of multiple new subsea cables in the Red Sea has been delayed, including 2Africa, Africa-1, IEX, etc. Such delay has forced Digital 9 Infrastructure (D9) to divest its investment in EMIC-1 cable, one fiber pair and a sub-system of the 2Africa cable system, which was expected to be completed by March 2025. But impacted by ongoing conflicts in the Red Sea area, the 2Africa cable project has been led to an indefinite delay to its final construction completion, as D9 said in a statement.

In February 2024, multiple subsea cables including AAE-1, TGN-EA/Seacom, and Europe India Gateway (EIG) cables were all damaged in the Red Sea, the repairs were not completed until the late July 2024, with an period of outage of approximately 5 months.

The AAE-1 cable was cut again in the Red Sea in December 2024 and repaired in April 2025.  And the PEACE submarine cable system had a cut in the Red Sea on March 4, 2025, repaired on on March 26, 2025.