Oman's ports have been seen as a safer alternative for cargoes seeking to avoid the strait of Hormuz, but recent drone attacks are raising questions over whether the sultanate can remain insulated from the ongoing US-Iran war.
Oman's deep-water ports — Duqm, Salalah and Sohar — sit on the Arabian Sea outside the strait, allowing tankers to bypass the narrow waterway and reduce exposure to potential security risks. Tanker traffic through the strait has slowed to a treacle after several tankers were attacked since the conflict began on 28 February and as insurers raised premiums or withdrew war risk coverage for the region.
Oman's geographical location has long been viewed as a key advantage to avoid the Hormuz critical chokepoint, encouraging companies to reroute cargoes through the region, with some buyers preferring to lift shipments directly from the sultanate's ports.
Ship-tracking data from Kpler showed that the vessel Valery Roma, carrying around 37,000t of 95R gasoline from Paradip, which was originally headed to Jebel Ali, is now being diverted to Oman's Duqm, confirmed by port agent data. The tanker Advantage Passion which was chartered to load 60,000t of jet fuel from Jubail for northwestern Europe on 3 March, is currently anchored near Oman's Sohar.
Sohar is the busiest in terms of overall cargo volumes and handles a mix of dry bulk and liquid cargoes, while Salalah, located at the southeastern tip of the country, serves as a major container transshipment hub, Rystad Energy commodity markets vice president Valerie Panopio said. Last year, Salalah expanded its container terminal capacity from 4.5mn TEU to 6.5mn TEU following upgrades at all six berths and a yard expansion.
But recent drone strikes on Oman's commercial ports have undermined hopes that the country can avoid a regional hostilities spillover, raising concerns among shipowners, insurers and traders about whether the country's ports can still function as transshipment hubs. Several drones struck the ports of Duqm and Salalah last week, with at least one fuel storage tank hit at Duqm and debris falling near terminal areas.
And changes to war-risk coverage on regional maritime routes have complicated the picture, with Sohar now falling within an insurer-designated war-risk area, potentially increasing charter and insurance costs for vessels calling at the port.
The Joint War Committee, which represents the London insurance market, recently expanded its list of high-risk maritime areas to include waters around Oman along with Bahrain, Djibouti, Kuwait and Qatar, according to a market circular. But one broker said that tanker booking enquiries from Sohar and other Omani ports were still increasing noticeably even though the area is classified as high risk.
Rising security risks are now beginning to feed into shipping insurance costs. Additional war-risk premiums (AWRP) for tankers transiting Omani waters have climbed to around 0.4pc of vessel value, up from about 0.1pc previously, according to an insurance broker. Shipping sources said rates have risen even further — to around 1pc — for vessels transiting the wider Mideast Gulf region.
