Latest Gulf attacks will have grave impact on energy trade

Latest Gulf attacks will have grave impact on energy trade

A plume of smoke emerges from an oil tanker after it was attacked in the Gulf of Oman. (Reuters)

This week’s attacks on two tankers in the Gulf of Oman mark a serious escalation in regional tensions, and will have a grave impact on the global oil trade. 

The attacks — on one Norwegian-operated and one Japanese-owned ship — were just the latest assaults on the region’s energy infrastructure, which have been widely blamed on Iran or Tehran-backed militia groups. 

They come just weeks after the “sabotage” of four tankers off Fujairah and a drone attack on an oil pipeline in Saudi Arabia. 

It is notable that tankers carrying Iranian cargoes, or tankers heading to Europe, seem to have been immune from such attacks. 

Faisal Faeq

President Trump on Friday made a blunt accusation against Tehran, saying the latest attack had Iran “written all over it.”

It is notable that tankers carrying Iranian cargoes, or tankers heading to Europe, seem to have been immune from such attacks. 

Despite the geopolitical implications of these events, there is a very real impact on business. 

Thursday’s attacks have dramatically escalated maritime risk levels — which are at a 16-year high — and that will prompt marine insurers to raise premiums, with a potential increase of the cost of commercial shipping as well.

The earlier attacks off the Fujairah coast in May already boosted risk premiums, which have increased by 5 percent to 15 percent depending on size and cargo. Expect further increases in the wake of the Gulf of Oman attacks — something that will have a negative impact on us all.

  • Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter: @faisalfaeq

 

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