News
26/10/02
Hormuz crude flows, ship attacks on the rise
New York, 2 October (Argus) — Record high tanker freight rates are pushing
strait of Hormuz crude flows — and Iranian attacks on tankers — to some of the
highest levels since the outbreak of war between Iran and the US. Total Middle
East crude oil exports are up by 36pc for the week ending 30 September at
17.92mn b/d, including 12.34mn b/d through the strait of Hormuz, according to
vessel information firm TankerTrackers.com. This would place weekly Hormuz crude
flows at around 80pc of their levels in February, prior to the joint US-Israeli
attacks on Iran, which is estimated by vessel tracking service Vortexa to be
around 15.14mn b/d. The US and Iran have not reached any sort of agreement for
ending the war, so the risks to ships continue to be as significant as they were
earlier in the war when less oil was flowing. But the risks, combined with a
limited pool of vessels available to transit Hormuz, has kept freight rates
high, incentivizing the dangerous work. The rate for a very large crude carrier
(VLCC) to move Middle Eastern crude through Hormuz to Asia-Pacific has been at
$34.31/bl since 18 September, its highest level since Argus began assessing the
route in November 2016. The spot tanker market is moving from
strength-to-strength following the start of the war in Iran, according to Harrys
Kosmatos, executive at tanker shipowner TEN, speaking at a forum in New York on
Wednesday. He highlighted a deal from earlier in the week for a 2004-built VLCC
that a charterer provisionally hired at $2mn per day to transit through the
strait of Hormuz. In comparison, a VLCC from the US Gulf coast-China was at
$366,704/d on 1 October, per Argus assessments. "You don't even need peace now
in Iran, you just need the oil to come out," Robert Bugbee, president of
shipowner Scorpio Tankers said. Iran steps up attacks The increased ship traffic
has been accompanied by more attacks from Iran, particularly on ships transiting
the strait on the southern US-assisted transit route. There were six attacks in
the last five days, per the UK Maritime Trade Operations Centre (UKMTO). This
includes an attack reported Friday against a tanker exiting the strait which
caused a fire onboard. The vessel remains in transit. Iran continues to target
crude exports from countries in the Gulf, including the UAE and Kuwait. "Several
oil tankers have been hit in the strait of Hormuz in recent days, three of the
latest of which are owned or leased by entities in the UAE," according to a
statement by the Persian Gulf Strait Authority published by Iranian-government
affiliated news agency IRNA on Friday. The Kuwaiti VLCC Kazimah III was hit on 1
October, according to Martin Kelly, former head of advisory at EOS Risk Group,
the second Kuwaiti state VLCC hit since 28 September. Since the start of July,
31 of 48 projectile strike incidents reported to UKMTO occurred on the southern
US-assisted transit lane. UKMTO acknowledged in its weekly report that there are
likely "other projectile strikes occurring that have NOT been reported to
UKMTO." By Charlotte Bawol Send comments and request more information at
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