Left Menu
Development News Edition

Asian shippers, refiners put ships on alert after drone attacks on Saudi tankers

Devdiscourse News Desk | Updated: 15-05-2019 17:17 IST | Created: 15-05-2019 16:02 IST
Asian shippers, refiners put ships on alert after drone attacks on Saudi tankers
Image Credit: Pixabay

After armed drones attacked Saudi oil tankers and pipelines, Asian shippers and refiners have put ships heading to the Middle East on alert and are expecting a possible rise in marine insurance premiums, industry sources said on Tuesday.

On Monday, armed drones attacked two of Saudi Aramco's oil pumping stations and forced the state producer to briefly shut its East-West pipeline, known as Petroline. The attack came two days after the sabotage of four oil tankers - two of them owned by Saudi Arabia - near the United Arab Emirates.

The attacks pushed up global oil prices by more than 1% on Monday, adding to rising costs for Asian refiners, who are now paying the highest premiums in years for spot cargoes in an already tight market after Washington stopped sanction waivers for Iranian oil buyers this month. "It's a headache for North Asian refiners who are heavily reliant on Middle East oil supplies. We are currently monitoring the situation. It's an unfavourable factor for the overall crude oil market ... driving up prices," said a North Asian oil refining source, declining to be named due to company policy.

Asia gets nearly 70 percent of its crude oil from the Middle East, and any disruption to oil production, loading facilities or key shipping routes such as the Strait of Hormuz could have a severe impact on Asian economies. Oil tankers typically refuel at UAE's Fujairah port, one of the world's largest bunkering hubs, where the ship attacks occurred. Following Sunday's attack on oil tankers, oil and shipping companies said they would have to alter their routes or take precautions near Fujairah.

"We had a ship which was refuelling at Fujairah when the incident occurred. Fortunately nothing happened," said KY Lin, spokesman at Taiwan's Formosa Petrochemical Corp. "There are no other (bunkering) choices nearby. We may choose to refuel at Singapore instead," Lin said. Japanese shipper Nippon Yusen has already decided to refrain from sending tankers to Fujairah for bunkering, maintenance or crew swaps except for emergencies, a company spokesman said. If its tankers need to anchor at the port, they are advised to shorten their stay as much as possible, the spokesman said.

Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore said: "There seems to be no increase in risk (insurance) premia as of yet." Risk premium increases would be inevitable, however, if security in the region continued to deteriorate, he added.


Noriaki Sakai, an executive officer at Idemitsu Kosan Co Ltd , Japan's second-largest refiner, told reporters on Wednesday that while there is no impact on oil loading or ship operations, the company is closely watching the situation. The second set of attacks was on Saudi Arabia's Petroline, which mainly transports light crude from the kingdom's eastern fields to its western port of Yanbu. Saudi oil exports to Asia were not disrupted because ships chartered by Asian refiners call mainly at the ports of Ras Tanura and Juaymah in the Gulf, the industry sources said.

But Petroline is important because it is an alternative route for Saudi Arabia's oil exports that bypasses the Strait of Hormuz, one of the sources said. "This attack doesn't affect physical supply, but the psychological effect is big," the source said. The pipeline attacks "likely represent an Iranian effort to expose the vulnerabilities of oil export infrastructure that can bypass the Strait of Hormuz," analysts with risk advisor and consultancy Eurasia Group said in a note. U.S. security agencies believe proxies sympathetic to or working for Iran may have attacked the four tankers at Fujairah rather than Iranian forces themselves, a U.S. official familiar with the latest U.S. assessments said on Tuesday. Iran has denied any involvement in the attacks.



Rethinking Rural Livelihoods in the Times of COVID-19

The reverse migration caused by COVID 19 pandemic has put an additional burden of about one crore people on Indian villages particularly in the states of Uttar Pradesh, Bihar, Bengal and Odisha. Besides increasing the risk of spreading the ...

‘Discounted Deaths’ and COVID 19: Anthropology of Death and Emotions

Death is a social event rather than the mere cessation of biological functions. As seen by anthropologists, death is not just physical but intensely social, cultural, and political....

Indigenous knowledge of communities a must for maximizing impact of community work

Generally, it has been observed that the majority of the academicians in higher education institutions neglect the wisdom of community people and throw their weight around thinking that they know everything and the community knows nothing. ...

In rebuking FBR, Pakistan’s courts take a stand for public health

The system, if implemented effectively, will allow Pakistans revenue service to combat the illicit trade in tobacco products and potentially add hundreds of millions of dollars to the states budget each year. ...


Latest News

Assam reports 56 new COVID-19 cases, state tally reaches 1272

With 56 new cases of COVID-19 reported in Assam on Sunday, the tally of coronavirus cases reaches 1272 in the state, said Assam Health Minister Himanta Biswa Sarma.Out of these 56 cases, 18 were reported in Lakhimpur, 12 from Barpeta, seven...

'US BIZ-MARKET OUTLOOK  Macro data, global cues to set equity market trend this week, say experts

Equity market sentiment this week will be guided by macroeconomic data, global cues and COVID-19 trends amid the phased reopening of the economy, analysts said.   The home ministry on Saturday said Unlock-1 will be initiated in the ...

Delhi govt seeks Rs 5,000 crore from Centre to pay employees' salaries: Sisodia

Faced with a drastic decline in tax collection, the Delhi government on Sunday sought an immediate assistance of Rs 5,000 crore from the Centre to pay salaries to its employees and meet office expenses in this hour of disaster. Addressing a...

Taapsee is a perfectionist: Rahul Dholakia

Rahul Dholakia says even though the production on the Mithali Raj biopic Shabaash Mithu is on halt due to the nationwide lockdown, he is impressed with the dedication of actor Taapsee Pannu, who is utilising her time at home polishing her c...

Give Feedback