ABU DHABI Ñ The Persian Gulf has been designated a high risk region amid U.S. plans to retaliate for the suicide attacks in New York and Washington earlier this month.

Gulf industry sources said the designation could drive up the price of shipping and insurance costs in the region. This will include surcharges on oil tankers entering Persian Gulf waters.

The sources cited plans by insurance underwriters to make the Gulf an exclusion zone from normal war risk cover. Such a move, they said, will add up to $20,000 a day in insurance premiums for each oil tanker that enters Gulf waters.

"This will result in devastating consequences for ships entering the Gulf and the businesses that serve them," Mohammed Al Khateeb, chief executive of Asry, said. "The new move has shifted the insurance cover to the level of the Gulf War period."

Al Khateeb told the Manama-based Gulf Daily News that industry executives are urging Gulf Cooperation Council states to oppose the move by international underwriters. He said already freight shipments have shot up by hundreds of dollars and called for a GCC subsidy.

On Sunday, GCC foreign ministers meet in Riyad to discuss the U.S. war plans against Saudi billionaire fugitive Osama Bin Laden. Several militaries in the Persian Gulf region have already been placed on alert.

Saudi Arabia has acknowledged that it failed in efforts to persuade the ruling Afghan Taliban movement to expel Bin Laden. Saudi Foreign Minister Prince Saud Al Faisal reported the failed effort after a meeting in Washington with U.S. President George Bush on Thursday.

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