| Submit your comments on this article | |
| Africa Horn | |
| Oil Supertankers May Avoid Suez on Somalia Piracy | |
| 2008-11-21 | |
| Shippers controlling almost a quarter the global fleet of crude-oil supertankers may avoid Egypt's Suez Canal after an increase in piracy off east Africa, potentially raising the cost of delivering the commodity. A.P. Moeller Maersk A/S, Europe's biggest shipping line, today became the first company to say it will divert oil tankers to sail around South Africa, following the lead of Norwegian chemicals shipping line Odfjell SE. Euronav NV, TMT Co. Ltd., BW Shipping Managers Pte, and Frontline Ltd. say they are reviewing whether to reroute their oil tankers. "We've always told our captains to stay far from the coast in that region, but that may not be enough now," Euronav's Chief Financial Officer Hugo De Stoop said by phone from Antwerp, Belgium, yesterday. "Terrorists or pirates, I don't really see the difference." Maersk, Frontline, Euronav, TMT and BW control 117 supertankers, enough to carry 2.7 days of global demand, according to Athens-based Optima Shipbrokers and data from the companies. Avoiding the Suez Canal, Egypt's third-biggest foreign-currency earner, will delay oil deliveries and reduce the supply of available vessels.
Three supertankers are currently navigating the canal and two more are scheduled to, according to ship-tracking data. The vessels have to offload part of their cargoes into an adjacent pipeline for collection on the other side to avoiding scraping the floor of the canal. Maersk owns 10 such ships, known as very large crude carriers, or VLCCs, as well as 60 refined oil tankers and 10 vessels designed to haul gas, spokesman Michael Storgaard said by phone from Copenhagen today. Most of its tanker fleet will be affected by the decision, along with three container ships. Somali pirates on Nov. 15 seized their largest ever prize, a Saudi Arabian supertanker laden with 2 million barrels of crude, worth about $104 million at current prices. The ship itself is worth about $148 million. The Sirius Star is now anchored in Somalia's northern Eyl coastal region with the hijackers negotiating a ransom payment with Vela International Marine Ltd., a Saudi Arabian state- backed oil-tanker company. There have been at least 88 attacks against ships in the area since January and Somalian pirates are holding 250 crew hostage on board 14 merchant vessels. Shippers sailing to the U.S. and Europe from the Middle East would instead have to take vessels around South Africa's Cape of Good Hope rather than the Suez Canal. The waterway links the Mediterranean and Red Seas. Bergen, Norway-based Odfjell SE, the world's largest owner of chemical transporters, already said it won't sail past Somalia while BW Gas Ltd., the biggest liquefied-gas shipper, may do the same. Customers have been given "the option to safeguard their cargo," BW Gas CEO Jan Hakon Pettersen said from Oslo yesterday. "For us, we would prefer them to use the cape route." BW Shipping, operator of 17 supertankers, may soon direct ships under its control away from Suez, CEO Andreas Sohmen-Pao said by phone from Singapore today. The Joint Hull Committee, representing ship insurers, is advising shipowners to "seriously consider" avoiding Somalian waters, Chairman Simon Stonehouse said Nov. 18. Insurance premiums will rise and unless the Egyptian government becomes "more actively interested" in combating piracy in the region they risk damaging the business of the Suez Canal, Stonehouse said. "If they stop shipping through the Suez, going round Africa instead, that's going to reduce supply," said Glenn Lodden, an analyst at DnB NOR Markets in Oslo. "There's a clear incentive for owners to go around Africa." Other shipowners are likely to follow should Frontline, Euronav and TMT choose to divert vessels and after the Joint Hull Committee urged companies to do so, Lodden said. Tanker owners may elect to charge more for sailing through Somalia's waters rather than rerouting, Per Mansson, managing director of shipbroker Nor Ocean Stockholm AB, said in an e- mailed note yesterday. "Maybe one or two will avoid, but most will go there against a premium to start with," Mansson said. Still, "one more hijacking of a tanker and the situation is in a different light." The fact owners say they are considering rerouting is buoying demand for derivatives used to bet on the future cost of shipping, said Ben Goggin, a broker at SSY Futures Ltd., a unit of the world's second-biggest shipbroker. | |
| Posted by:john frum |
| #14 i agree with penguin , and the saudis sending in the shabaab this could just too save face and make it look like they really aren't behind it |
| Posted by: chris 2008-11-21 18:29 |
| #13 Um, the Saudi ST was taken off the coast of Kenya. Ain't no Persian Gulf-Suez Canal route I can think of which features a Kenyan pit-stop. The fact that the *ONLY* major oil tanker taken so far was clearly on a Cape-of-Good-Hope route is almost suggestive that the pirates might not have been wanting to shit where they eat. |
| Posted by: Mitch H. 2008-11-21 12:00 |
| #12 IIRC, Suez Canal fees under Nassar rose so high that going the long way around the Cape became more economical for a while. So everyone is a pirate: the Somalis, the Egyptians. They all want a piece of the action. |
| Posted by: Alaska Paul 2008-11-21 10:44 |
| #11 The fact owners say they are considering rerouting is buoying demand for derivatives used to bet on the future cost of shipping, said Ben Goggin, a broker at SSY Futures Ltd. Derivatives were part of the cause of the financial meltdown. I smell Soros and company in the middle of this. |
| Posted by: Thealing Borgia 122 2008-11-21 10:34 |
| #10 Ignorance of Journalist have no cure i guess. 210000t is the maximum that Canal can take and that is very recent. Supertanker is an informal term used to describe the largest tankers. From Wikipedia: Today it is applied to very-large crude carriers (VLCC) and ULCCs with capacity over 250,000 DWT. Supertankers were made because small tankers were blocked by war in Suez canal. |
| Posted by: Uleck Ghibelline9225 2008-11-21 10:26 |
| #9 Egypt's second industry might be tunnel exports on their eastern border. |
| Posted by: Richard of Oregon 2008-11-21 10:07 |
| #8 Separately, if tourism is Egypt's number one industry, and taxing Suez Canal shipping is number three, what is number two? Collecting from the US tax payer that jiszyah Carter agreed at Camp David. |
| Posted by: JFM 2008-11-21 09:39 |
| #7 The fact that we let pirates dictate terms to us shows that our will to protect our civilization is once again in the toilet. |
| Posted by: DarthVader 2008-11-21 09:38 |
| #6 I must be missing something. If companies are willing to spend so much money on ships, instead of paying the flipping ransom, how about some escort ships (mercenary type)? How about a couple of helicopters on a super tanker? I must be missing something. How about a Trojan horse? |
| Posted by: Art 2008-11-21 09:24 |
| #5 Chasing a supertanker is great fun, but what on earth would even a pit bull do if he caught one? Separately, if tourism is Egypt's number one industry, and taxing Suez Canal shipping is number three, what is number two? |
| Posted by: trailing wife 2008-11-21 08:48 |
| #4 I'd say the tankers need to hire some Brothers with Pit Bulls to go medieval on these bozos. |
| Posted by: WilliamMarcyTweed 2008-11-21 08:35 |
| #3 Read that the Suez Canal supertanker transit fee is around $500,000 and $5B total. That's serious incentive for the Egyptians. |
| Posted by: ed 2008-11-21 07:08 |
| #2 Bullsh*t They are hyping the threat to fluff oil prices. Bush should adamantly say that pirates will feel the wrath of the USN. |
| Posted by: Penguin 2008-11-21 00:48 |
| #1 Oh for heaven's sake - what is civilization or colonization good for anymore. How about convoys, escorts, raiding parties, shore bombardments, reflagging, utimata, and so on and so on. You'd think they'd learn even as we unleash the really big weapons - global recession and/or depression - if that doesn't teach them, I'm afraid we're off to Coulterville - invade, kill and convert. |
| Posted by: Jeremiah Thaise1218 2008-11-21 00:10 |