As tensions escalate in the Middle East, global trade is once again facing serious headwinds. The ongoing conflict between Israel and Iran is not only a humanitarian and geopolitical crisis—it’s also creating ripple effects across global shipping routes and insurance markets. Rising shipping costs are putting pressure on supply chains and increasing financial strain on importers and exporters. At Singiri Auditing, we help UAE-based businesses stay financially resilient during turbulent times. Here’s an in-depth look at how the current conflict is impacting shipping costs, insurance premiums, and ultimately, your business operations and accounting needs. Understanding and managing shipping costs is now more critical than ever for strategic financial planning.
Surge in Maritime Insurance Premiums
According to Marsh McLennan, insurance premiums for vessels transiting through key
chokepoints like the Strait of Hormuz have risen over 60% since the conflict began. For
example:
Hull and machinery insurance rates have increased from 0.125% to 0.2% of vessel
value.
A ship worth $100 million now incurs $200,000 in insurance premiums—up from
$125,000.
Similarly, war risk insurance for ships traveling to Israeli ports has more than tripled,
reaching up to 1.0% of vessel value per week. These cost increases are feeding directly into
global freight charges, pushing up the cost of imports and exports across the region.
Why This Matters for UAE Businesses
As a major logistics hub and import-export center, Dubai and the wider UAE are particularly
exposed to disruptions in regional trade flows.
Companies relying on raw materials or goods from Israel, Iran, or via the Red Sea
may experience delays, rerouting costs, and inflated insurance charges.
Firms engaged in re-export, freight forwarding, or maritime support may also see
bottom-line impacts.
These developments demand proactive financial planning, regular cost audits, and accurate
VAT and tax filings to safeguard profitability.
GCC’s Financial Buffer and Risk Management
Despite rising tensions, GCC insurers remain well-capitalised. According to S&P and Fitch
Ratings:
Gulf insurers have strong capital buffers to absorb volatility.
Israeli institutions are being supported by government-backed risk coverage schemes.
However, a wider escalation could affect sovereign credit ratings and investor
confidence across the region
This puts the spotlight on robust auditing, financial reporting, and business continuity
planning for UAE enterprises.
Broader Economic Risks: Tourism & Trade
Other Middle Eastern economies such as Egypt and Jordan are already feeling the economic
heat, especially in sectors like:
Suez Canal revenues: Potential drop if rerouting continues.
Tourism: Decline in European visitors to Jordan could impact fiscal revenues.
While the UAE is better insulated, the knock-on effects on regional supply chains and
consumer prices could impact your business in indirect but significant ways.
How Singiri Auditing Can Help
At Singiri Auditing, we offer strategic financial services to help you navigate economic
uncertainties. Our team of experienced auditors and accountants in Dubai can support your
business with:
✅ Cost audits and financial impact assessments
✅ VAT & Corporate Tax compliance amid rising costs
✅ Business performance analysis & cash flow management
✅ Support for trade, logistics, and maritime-linked businesses
Let’s Talk
If your company is affected by recent shipping disruptions or rising insurance premiums, now
is the time to reassess your financial strategy.
📍 Visit us at our Dubai office near DAFZA Metro Station
📧 Email: Singiriandco@gmail.com
📞 Call: +971-589320410
Let Singiri Auditing help you stay financially strong—no matter the storm
