Two tanker owners suspend Gulf bookings as tension now ‘as high as it gets’

Special Two tanker owners suspend Gulf bookings as tension now ‘as high as it gets’
Fire and smoke billow from the Norwegian owned Front Altair tanker in the Gulf of Oman. (AFP)
Updated 13 June 2019

Two tanker owners suspend Gulf bookings as tension now ‘as high as it gets’

Two tanker owners suspend Gulf bookings as tension now ‘as high as it gets’
  • Within hours of the attacks on two oil tankers in the Gulf of Oman, tanker firms DHT Holdings and Heidmar said they had suspended new bookings to the Gulf
  • Shipping association BIMCO, which represents some 60 percent of the world’s merchant fleet, urged its members to ‘exercise extreme caution’ in the area

LONDON: At least two oil-tanker owners have suspended bookings to the Gulf following Thursday’s attacks in regional waterways, with one shipping analyst saying tension in the area “is now as high as it gets” short of an outright war.

Within hours of the attacks on two oil tankers in the Gulf of Oman, tanker firms DHT Holdings and Heidmar said they had suspended new bookings to the Gulf, Reuters reported.

Neither company responded to a request to comment but the news was confirmed to the agency by three ship brokers.

Shipping association BIMCO, which represents some 60 percent of the world’s merchant fleet, urged its members to “exercise extreme caution” in the area — but does not expect long-lasting disruption unless the situation escalates further.

“The tension in the Strait of Hormuz and the Arabian Gulf is now as high as it gets without being an actual armed conflict,” Peter Sand, chief shipping analyst at BIMCO, told Arab News.

“(We advise) our members to exercise extreme caution and instruct their vessels to take precautions … when operating in the area. Depending on the risk acceptance levels of (a particular shipping) company, and to the extent operations allow, it could be considered to instruct ships to avoid the area or keep as much distance as possible.”

Sand said it was understandable that some shipping companies had stopped bookings to the area but doubted whether others will follow.

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“Any attack on international shipping is one too many,” he said.

“This will likely cause ship owners and operators to ask for a premium on freight rates for trading in the area, as risk is now clear and present.

“While still being early hours to do a full and all covering assessment, BIMCO does not expect this to cause a massive and long lasting disruption to seaborne oil flowing out of (the Gulf) — unless this is only the beginning of an escalation of tension in the wider region.”

The Strait of Hormuz is the “No. 1 oil shipping chokepoint in the world,” Sand added.

Almost a fifth of the world’s oil passes through the Strait — some 17.2 million barrels per day — including crude from OPEC members Saudi Arabia, Iran, the UAE, Kuwait and Iraq.

Other governments and maritime agencies also urged caution for ships operating in the region.

The Norwegian Maritime Authority issued a warning to the country’s merchant fleet, advising ships to “exercise high care and alertness in the region,” AP reported.

“Although there is no full clarity in the background for these attacks, the Norwegian Maritime Directorate’s advice is to keep a good distance to Iranian waters based on today’s event,” the agency said.