Gulf tanker incidents to raise shippers’ costs, cut traffic

In this picture taken on Tuesday, April 7, 2015, and released by the semi-official Fars News Agency, Iranian warship Alborz, foreground, prepares before leaving Iran's waters, at the Strait of Hormuz. (AP)
Updated 21 July 2019
0

Gulf tanker incidents to raise shippers’ costs, cut traffic

  • Many of the 2,000 companies operating ships in the region have ordered their vessels to transit the Strait of Hormuz only during the daylight hours and at high speed

WASHINGTON: Recent seizures and attacks aimed at oil tankers in the Strait of Hormuz will raise insurance rates for shipping companies and, if unchecked, reduce tanker traffic in the vital waterway, according to energy experts.
Britain’s foreign secretary said that Iranian authorities on Friday seized two ships, one flying under the British flag, the other registered in Liberia. The events occurred in a passageway that carries one-fifth of the world’s crude exports.
“If this kind of problem continues, you might see people start to shy away from the (Persian) Gulf or try to reflag — not be a British tanker,” said energy economist Michael Lynch.
The near-term impact will fall most heavily on the shipping industry in the form of higher insurance rates, said Lynch, who is the president of Strategic Energy & Economic Research Inc.
Richard Nephew, a Columbia University researcher who wrote a book on sanctions, also believes the tanker seizures could create “a real risk premium” for companies that operate in the Gulf and insurers that underwrite them.
“Certainly we’ve seen concern with this in the past on sanctions grounds, and I would imagine security groups would be a far more complicating element,” Nephew said.
On Friday, Iran’s Revolutionary Guard said it took the British tanker Stena Impero to an Iranian port because it allegedly violated international shipping regulations. An Iranian news agency said the Liberian-flagged Mesdar was briefly detained and then released after being told to comply with environmental rules.
The seizures marked a sharp escalation of tension in the region that began rising when the Trump administration withdrew from a 2015 nuclear deal with Iran and imposed severe restrictions on Iranian oil exports and other sanctions.

FASTFACT

The British navy seized Iran’s Grace 1 tanker in Gibraltar on July 4 on suspicion of smuggling oil to Syria in breach of EU sanctions.

Many of the 2,000 companies operating ships in the region have ordered their vessels to transit the Strait of Hormuz only during the daylight hours and at high speed. But only a handful of the companies have halted bookings.
The tensions in the Gulf also pushed oil prices slightly higher. Brent crude, the international standard, rose 0.9 percent to $62.47 a barrel on Friday, while benchmark US crude gained 0.6 percent to settle at $55.63.
There’s a long history of shippers enduring threats in the region.
“There have always been little problems around the Gulf where people will say, ‘You’re in our territorial waters,’ but usually that doesn’t go so far as the seizure of tankers,” Lynch said.


Sudan launches 9-month economic rescue plans

Updated 23 September 2019

Sudan launches 9-month economic rescue plans

  • The measures will include rationalizing spending and tackling of inflation
  • Subsidies for bread or petrol would continue until around June 2020

KHARTOUM: Sudan’s transitional government will launch in October a 9-month economic rescue plan to stabilize the economy, Finance Minister Ibrahim Elbadawi said on Monday.
The measures will include rationalizing spending and tackling of inflation, Elbadawi said, adding that subsidies for bread or petrol would continue until around June 2020.