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Breaking News:

Gasoline Draw Sends Oil Prices Higher

Kidnapping Now More Profitable for Pirates Than Cheap Oil

Pirates operating off the coasts of West Africa are having a tough time turning a profit with oil prices so low, forcing them to once again adapt and shift focus away from hijacking oil tankers to the more lucrative kidnapping for ransom.

The conclusions are part of a report drawn up by the U.S. foundation Oceans Beyond Piracy (OBP), a privately funded and independent non-profit organization located in Colorado. "They have had to move towards a faster model and that faster model is kidnappings," OBP's Matthew Walje said. Walje went on to say that in one instance, ransom payouts were as high as $400,000.

Related: Why Oil Prices Will Likely Drop Below $40 Soon

"It only takes a few hours as opposed to several days to conduct the crime itself," he added. "Fuel prices have fallen, which cuts into their bottom line."

Amid a surge in the number of crew members being kidnapped, 23 people were killed by pirates in West Africa in 2015. Overall in 2015, there were 54 attacks, down from 67 the year before. A majority of the piracy assaults were kidnappings, rather than the oil tanker hijackings for cargo, which accounted for the majority of piracy assaults in previous years. Oil tankers were targeted in just 18 percent of these maritime attacks, compared to more than 50 percent in 2014, OBP further shows.

Related: A 4.5-Million-Barrel Per Day Oil Shortage Looms: Wood Mackenzie

Experts say that hijacking an oil tanker poses many logistical issues for pirates, such as the need for more vessels, whereas kidnapping occur quickly, enabling the pirates to then focus on evading authorities. Walje explained that some of the gangs operating in the gulf are the same ones that have operated within Nigeria, where kidnapping is a common crime. Last month, Nigeria and Equatorial Guinea agreed to combine patrols in an effort to increase security.

The estimated costs of piracy and armed robbery in the Gulf of Guinea were $719.6 million in 2015, down from $983 million in 2014. In 2014, 47 percent of this cost was borne by the maritime sector, according to OBP.

By James Burgess of Oilprice.com

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