Home›Commodities›Energy›Insurers cut upstream oil and gas premiums for project…

Insurers cut upstream oil and gas premiums for projects outside the Middle East

Premiums for upstream energy insurance outside the Middle East have fallen about 25% year to date, and some insurers have cut rates by as much as 50% for certain projects, according to brokers.

Reported · Written up by our desk · Energy

Global insurers are shifting oil and gas upstream coverage away from Middle East conflict risk, turning instead to underwriting drilling and project construction ventures in other producing basins, OilPrice reports.

The change follows the end of February escalation that made the region a war zone, pushing war risk premiums higher and contributing to delays or cost inflation for new drilling and construction plans.

According to insurance brokers cited by the Financial Times, premiums for upstream energy insurance outside the Middle East have tumbled by about 25% year to date, with some insurers cutting rates by as much as 50% even in cases where it means taking a short term loss.

Insurers are now competing for market share in a smaller pool of upstream developments that are not tied to active war zones or chokepoints in the Middle East, as oil and gas companies increase exposure to basins outside the region.

More like this

Sources