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20% OF THE SHIP'S VALUE.
FOR ONE EXPOSURE.
Ten voyage economics tests reveal where war-risk premiums overwhelm freight, where extraordinary tanker rates still cover the bill, and which terms decide the outcome.
A $60 million tanker fixed for a $7 million short-haul voyage can face a $12 million war-risk bill if its underwriter charges 20% of insured hull value. The freight is already exhausted before bunker fuel, port costs or crew time are paid. The same tanker on a $30 million Black Sea-to-India fixture may still clear the insurance hurdle. In this market, the voyage length and the price of the cargo movement matter as much as the risk percentage.
The 20% quote is real, but it is not the Black Sea price
Broker indications / October–NovemberMost exposed CPC-linked quotations
Market reports identify exceptional quotes as high as 20% of hull value on some visits to the Caspian Pipeline Consortium terminal near Novorossiysk, especially certain lower-insured-value ships. Another broker reported 5%–15% with most at 7.5%–10%.
Selected Romania/Bulgaria transits
Late-October broker indications for breach premiums on routes toward these ports were dramatically lower, with one approximately 0.5% average indication. Geography and individual call history matter; these are not guarantees of future cover.
Three hulls, one extreme premium
Notional insured hull values / one exposure$30M vessel
At 20%, the insurance alone is equivalent to 200 days of $30,000/day gross earning before the voyage's own costs.
$60M vessel
At 20%, the additional premium can exceed an entire short-haul tanker freight contract.
$120M vessel
Applying the same extreme percentage to a high-value ship is a stress scenario, not evidence that such ships have received these quotes.
Comparison assumes the underwriter's charged basis equals the stated insured hull value and the quoted percentage applies once. Quotes may involve different exposure periods, deductibles, limits, clauses or premiums on additional interests.
Ten voyage economics screens
Freight minus voyage costs and gross hull APThese ten ship-and-route combinations test the financial consequence of exposure. Only the Black Sea–India $30M Suezmax and Baltic–India $23M Aframax freight anchors are based on reported market transactions. All other freight, operating costs, hull values and route-specific insurance percentages in the screen are declared illustrative assumptions. The table is ranked by modeled contribution, most negative first, not by actual current charter-market profitability.
| Economic rank / voyage | Reference ship | Gross freight | Hull AP rate | Gross AP | Other voyage costs | Contribution after AP | AP break-even |
|---|---|---|---|---|---|---|---|
| 01 · CPC / Novorossiysk → Mediterranean | Suezmax / $60M | $7.00M* | 20%* | $12.00M | $1.41M* | −$6.41M | 9.3% |
| 02 · Odesa grain → East Mediterranean | Panamax / $30M | $2.50M* | 15%* | $4.50M | $0.93M* | −$2.93M | 5.2% |
| 03 · Chornomorsk → East Mediterranean | Feeder / $30M | $3.40M* | 15%* | $4.50M | $1.47M* | −$2.57M | 6.4% |
| 04 · Novorossiysk products → Italy | LR2 / $60M | $7.00M* | 12%* | $7.20M | $1.72M* | −$1.92M | 8.8% |
| 05 · Izmail → Marmara | Small bulker / $30M | $1.75M* | 10%* | $3.00M | $0.66M* | −$1.91M | 3.6% |
| 06 · Red Sea / Bab el-Mandeb → Suez | Feeder / $30M | $3.20M* | 5%* | $1.50M | $1.35M* | +$0.35M | 6.2% |
| 07 · Constanța → Mediterranean | Bulker / $30M | $2.15M* | 0.5%* | $0.15M | $0.89M* | +$1.11M | 4.2% |
| 08 · Gulf / Hormuz → West India | VLCC / $120M | $24.00M* | 7%* | $8.40M | $2.39M* | +$13.21M | 18.0% |
| 09 · Black Sea crude → West India | Suezmax / $60M | $30.00M† | 20%* | $12.00M | $4.38M* | +$13.62M | 42.7% |
| 10 · Ust-Luga → West India | Aframax / $60M | $23.00M† | 2%* | $1.20M | $4.52M* | +$17.28M | 30.8% |
† Reported freight anchors: approximately $30M Black Sea–India Suezmax and $23M Baltic–India Aframax, Reuters late October 2026. These are freight-market indications, not confirmed full voyage profit or evidence of the insurance paid. * Editable hypothetical values: all route-specific AP selections, non-† freight, and operating costs. No empirical probability or underwriter quote is claimed. No no-claims bonus or charterer reimbursement is credited in this table.
Where each voyage breaks
Operating constraint / decision boundaryCPC to Mediterranean: insurance larger than freight
A short tanker movement cannot exploit a record long-haul freight premium. Even with relatively few sea days, a $12M additional hull bill overwhelms $7M hypothetical revenue.
Odesa grain: commodity margins meet insured-asset cost
On a hypothetical $2.5M voyage, a 15% gross quote against a $30M ship leaves no freight to pay the crew, bunkers and terminal bill. Cargo value does not fund the ship's insurance unless the contract allocates it.
Chornomorsk feeder: surcharge alone cannot bridge the bill
The $3.4M sample voyage revenue is not enough against a $4.5M extreme-type AP. CMA CGM's newly effective $35/TEU Black Sea surcharge is a real tariff, not the same thing as a hull war premium or a guarantee of total cost recovery.
Novorossiysk LR2: high freight can still be insufficient
A $7M product-tanker fixture looks strong until a 12% hull premium consumes $7.2M, before time, bunkers and agency costs. LR2 hull values and assured amounts can differ materially.
Izmail to Marmara: short distance does not fix an asset-based premium
Even modest freight on a short voyage can be overwhelmed when insurance is levied on the entire hull rather than on voyage length. A $30M hull and 10% assumed AP yields $3M of cover expense.
Bab el-Mandeb: a thin margin is not resilience
A $3.2M sample feeder voyage with 5% assumed AP produces only a thin positive contribution. A delayed convoy, re-route, additional listed-area exposure or cancellation could remove it.
Constanța: a listed sea does not mean a 20% quote
Broker indications around 0.4%–1% for some Romania/Bulgaria transits differ fundamentally from exposed Russian or Ukrainian port calls. The 0.5% case produces manageable premium cost.
Hormuz: a $120M hull amplifies a 7% quote
Market commentary places some Middle East Gulf hull war cover around 7%–9% in early November, with exceptions. Applied to a hypothetical $120M ship, 7% costs $8.4M. Large freight income may offset it, but crew and mine risks remain.
Black Sea to India: $30M freight changes the answer
Reuters reported one-way Suezmax rates reaching $27M–$30M for Urals cargoes. The example remains positive even if a $60M hull were quoted a full 20% AP, although sanctions, actual routing and contract terms may rule out the trade.
Baltic to India: high freight, different insured voyage
Reuters also reported roughly $23M one-way Baltic-to-India Aframax freight. The sample uses 2% war AP only to show sensitivity; that percentage is not a verified quote for the lane.
Who really pays the premium?
Contracts and cash timingAdditional hull AP may require payment or binding before entry. The legal payer and timing are policy- and charter-party-specific.
A war-risk clause may allow recovery of defined additional premiums; confirm notice, invoices, limits and exceptions.
No-claims bonus is usually conditional. Do not net an unearned rebate against the funding required to bind cover.
War P&I, cargo, loss of hire, crew, sanctions exclusions and uninsured exposure require separate assessment.
Four reasons a contribution-positive voyage can still be rejected
Hard stops outside the cash modelA broker indication without firm terms, acceptable limits and verified underwriter does not resolve the ship's exposure.
Confirmed attack threats, mine risks, degraded rescue access and crew consent cannot be converted into a financial hurdle rate.
Beneficial ownership, cargo origin, ports, counterparties, insurers and payment chains require separate legal screening.
Call duration, multiple listed areas, return passage, late redelivery or automatic cancellation may change the quoted premium.
WAR-RISK VOYAGE / LIVE ECONOMIC STRESS TEST
Load any of the ten voyage cases or change hull value to $30M, $60M or $120M. The tool calculates upfront additional premium, the owner/charterer cost split, voyage contribution, premium break-even, and the potential effect of a conditional no-claims rebate. It does not quote insurance, screen sanctions, or authorize a dangerous voyage.
Each cell shows contribution before any no-claims rebate, using the selected hull, route costs, number of AP assessments and reimbursement percentage. Click a cell to test that combination.
| Cash component | Calculation / commercial allocation | USD millions |
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