Red Sea chaos escalated recently as Houthi rebels sank the dry-bulk freighter Tutor using a kamikaze drone boat, sending commercial shipping costs soaring. Insurance rates for vessels now reach 6% of their value, impacting global containerized freight and port operations.

Iran-supported Gulf of Aden, the vital Bab el-Mandeb chokepoint, and commercial ships in the southern Red Sea are the targets of increasing rocket and drone attacks by the Houthi rebels. The rebels have vowed to cross into the Mediterranean Sea. A major escalation occurred recently with the sinking of the dry-bulk freighter Tutor by a kamikaze drone boat. Containerized freight costs have skyrocketed due to the continued unrest, and insurance expenses have also increased.

Bloomberg talked to two people who are knowledgeable about the marine insurance industry. According to them, covering a commercial vessel for passage now costs 6% of the ship's entire worth, up from 3% to 4% previously. Put otherwise, a ves...