Saudi Arabia mulls state-backed insurance scheme to lower shipping costs

Saudi Arabia is evaluating a plan to create a state-supported insurance pool aimed at reducing premiums for ships navigating the Gulf and Red Sea. The scheme could deliver as much as 700 million riyals in commercial cover, supplemented by the Saudi Export-Import Bank's participation. Both domestic insurers and international companies might be invited to join the initiative.

Officials stress that talks are still at an early stage and a binding agreement is not guaranteed. Shipping traffic remains heavily disrupted as the Iran conflict enters its sixth month, with elevated insurance costs and limited coverage constraining trade flows. The situation is forcing Gulf economies to reroute oil tankers around Africa to avoid Houthi attacks, underscoring the strategic importance of affordable maritime insurance.