As conflicts escalate along the southern borders with Israel, maritime shipping is experiencing higher war risk insurance premiums for deliveries into Lebanon, particularly for essential goods like fuel.

This follows similar increases in the aviation industry, which prompted Middle East Airlines to move some of its aircraft outside of Lebanon.

Just yesterday, an extra 9,500 LBP were added to the cost of a gasoline can due to a temporary war risk insurance premium of $7 per ton of gasoline, equivalent to $5.28 per thousand liters or 0.106 cents per gasoline can.

Member of Syndicate of Gas Station Owners George Brax explained that this type of insurance was not previously applied to shipments. However, due to growing tensions and increased risks, insurance companies are now imposing fees for war risks related to transporting fuel to Lebanon.

Brax highlighted that the true concern lies in a significant development, such as the closure of sea routes and the market's inability to access this essential resource.

He emphasized the importance of keeping the sea route open to provide the local market with fuel.

Importers and companies are preparing for worst-case scenarios, but the adequacy of inventory depends on the content at the time of the sea route closure, which could vary from 40% to 100%. Importantly, demand remains normal in all regions except the South.

Regarding concerns about rising shipping costs for consumer goods, Head of Food Importers Syndicate Hani Bohsali clarified that the impact of increased war risk insurance premiums alone is relatively minor, ranging from 2% to 5%. So far, no extra insurance premiums for war risks have been imposed on shipping vessels for contracts signed before the war began.

Bohsali expressed additional worries about the potential refusal by insurance companies to provide complete war risk coverage.

In such a scenario, he raised the question of whether merchants would continue importing goods or halt purchases and imports of food products from abroad. He emphasized the real danger in this situation, similar to what occurred with Middle East Airlines, which reduced its flights and air traffic.

In conclusion, if Israeli airstrikes commence, the ability to bring ships by sea could be compromised, and the problem would extend beyond price increases.

All conditions and variables would change, and it's challenging to predict the outcome, such as the possibility of an attack on the container terminal in the port of Beirut, which had already suffered the port explosion.