News

Gulf tanker incidents may raise shippers costs, cut traffic

Gulf tanker incidents may raise shippers  costs, cut traffic
Business
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.

Iran on Friday seized a British-flagged oil tanker and a second Liberian-flagged ship was briefly detained. 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, 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 seizure 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.

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% to $62.47 a barrel on Friday, while benchmark U.S. crude gained 0.6% 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.
Read more on CTVnews
News Topics :
Similar Articles :
World
Seizures of oil tankers and other hostile Iranian measures in the Strait of Hormuz are already raising insurance rates for shipping companies and could eventually reduce tanker traffic in the...
Top Stories
LONDON/DUBAI — Iran’s Revolutionary Guards said on Friday they had captured a British flagged oil tanker in the Gulf after Britain seized an Iranian vessel this month, ratcheting up tension along...
World
A speedboat of the Iran s Revolutionary Guard moves around a British flagged oil tanker Stena Impero, which was seized on Friday by the Guard, in the Iranian port of Bandar...
World
DUBAI Reuters Iranian Revolutionary Guards seized an Iraqi oil tanker in the Gulf which they said was smuggling fuel and detained seven crewmen, Iran’s state media reported on Sunday,...
Business
TEHRAN, Iran Iranian forces seized a ship in the Persian Gulf suspected of carrying smuggled fuel, state media reported Sunday, marking the Revolutionary Guard s third seizure of a...