Markets are reacting favorably as…
Shareholders of Occidental Petroleum have…
While the industry has struggled to find ways to cope with the decline in oil prices, there has been one positive note: the dip in crude prices has at least in part contributed to a decrease in incidents of piracy in Southeast Asian waters.
Increased law enforcement activity has also been a factor. Promotion Group International, which provides security data about onshore and maritime activities for companies and government, notes that between August 23, 2015 and August 23, 2016, there were only four ship hijackings, as compared to the same period from 2014 to 2015, during which time there were 22. Fifteen of those 2014/2015 incidents involved oil tankers.
Promotion Group International’s Director, Tom Bacon, noted that because the financial incentive to re-sell stolen oil has declined, so has the “siphoning and theft of oil.” The price of fuels for ships has followed a similar decline as other markets. As global prices saw an approximate 50 percent drop, from August of 2014 to August of 2016, 380 CST bunker fuel deliveries from Singapore fell 58 percent. S&P Global Platts showed that product was assessed at $260 per metric ton this week.
Law enforcement has also played a role. Several crime rings that have engaged in criminal maritime activity have been broken up, and Indonesia and Malaysia have increased patrols in the Strains of Malacca.
In May, Indonesian naval patrol boats intercepted a hijacked tanker near Indonesia and rescued the crew. At that time, Indonesia, the Philippines and Malaysia agreed to increase patrols in the Sulu and Celebes seas following activity by militants in those waters. A more stable political situation in Southeast Asia has also been a contributing factor.
Tim Wilkins, the regional Asia manager for the International Association of Independent Tanker owners notes that piracy remains a problem in the Gulf of Guinea because of the political unrest in Nigeria. Pirates there, said Wilkins, are more aggressive and well-coordinated in their use of high-powered weapons.
By Lincoln Brown for Oilprice.com
More Top Reads From Oilprice.com:
Lincoln Brown is the former News and Program Director for KVEL radio in Vernal, Utah. He hosted “The Lincoln Brown Show” and was penned a…