Global insurers are cutting premiums for upstream oil and gas projects outside the Middle East, while the world's biggest producers redirect exploration toward safer basins. Months of war in the Gulf have reshaped where the industry drills and where underwriters compete for business.
Insurers are slashing premiums on upstream energy projects that do not depend on the Strait of Hormuz and other Middle East chokepoints, cutting rates by as much as 50% even at a short-term loss. The move follows the region turning into a war zone at the end of February, which left new projects facing delays and cost inflation.
Big Oil has responded by pushing exploration into lower-risk basins such as Guyana, Namibia, Brazil, Nigeria, Turkey, and Venezuela. Strong oil prices and the hunt for secure supply are driving the shift.
Insurers compete outside the Gulf
Premiums for upstream energy insurance outside the Middle East have fallen about 25% so far this year, insurance brokers told the Financial Times. As oil companies concentrate on projects away from the region, underwriters are competing for a shrinking pool of developments that sit outside an active war zone.
The pricing trend runs deep. According to WTW: "ratings are 'through the floor'", the broker said in its April Energy Market Review 2026, which reported reductions of 15-20% for core upstream risks with clean loss histories and 40%-plus cuts in exceptional cases.
Big Oil doubles down far from the Gulf
Exxon and Chevron are expanding offshore Guyana, while Exxon is progressing the $7-$8 billion Owowo project off Nigeria and eyeing a final investment decision as early as next year. Its Nigerian subsidiary and partners committed $1 billion to the Usan Infill Project, set to unlock 40,000 additional barrels within 18 months. BP in April bought into three offshore exploration blocks in Namibia, joining Shell, TotalEnergies, and Galp.
The economics favor the push. Exploration created $54 billion of value from 2021 to 2025 after $97 billion of spending, based on a long-term Brent price of $65 per barrel, according to Wood Mackenzie. At $85 per barrel, that value more than doubles to $120 billion.
Venezuela races a deadline
Venezuela sits among those basins. Its oil ministry has kept a July 28 deadline for partners to migrate contracts to a new legal framework approved in January. The reform covers about two dozen foreign and local companies, including Chevron, Repsol, and Eni, and offers operating autonomy under a new taxation model.
Sources: Oilprice.com, Investing.com
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