Rising war-risk premiums and delays in Middle East oil projects drive insurers to underwrite upstream ventures elsewhere.
Global insurers are redirecting coverage for oil and gas upstream projects away from the Middle East after five months of conflict-driven uncertainty. War-risk premiums and cost inflation have delayed or inflated expenses for drilling and construction in the region, once the world’s lowest-cost oil producer.
Before the conflict, insurers had moved past ESG-driven restrictions on fossil fuel projects. However, the Middle East’s instability has disrupted underwriting, prompting firms to seek alternatives in more stable regions.
The shift may increase project costs and timelines for energy companies reliant on insurance for large-scale ventures.