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Oil Tankers Dodge Top Mideast Refueling Hub after Ship Attacks

Logistic News - Published on Wed, 10 Jul 2019

Image Source: hellenicshippingnews.com
Bloomberg reported that oil tanker owners are avoiding sending their ships to the Middle East’s main refueling hub after a spate of attacks on vessels in the past two months ratcheted up tensions and highlighted the growing risks of operating in the region. Strikes on tankers just outside the Persian Gulf in mid-June were the second in a month near the Strait of Hormuz, the chokepoint through which about a third of global seaborne oil moves. Now demand for ship fuel at Fujairah, the United Arab Emirates coastal shipping hub close to the Strait, has waned as some tankers stay away.

Mr Matt Stanley, a senior broker at Star Fuels in Dubai, said that “Only expect issues to get worse before they get better.” He said that Fujairah is seeing “a significant drop in demand owing to war-risk premiums” that are levied by ship insurers.

However, the root cause of the slump, whether ships are avoiding the Middle East altogether or just skipping Fujairah, isn’t completely clear. But since the attacks in early May, insurance costs have soared and some owners turned wary of sending their carriers to the region. One of the largest, Frontline Ltd., even temporarily paused trading from the Persian Gulf.

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Posted By : Mohan Sharma on Wed, 10 Jul 2019
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