With Saudi Arabia resuming oil…
A recent report from Platts…
In 2005, after 22 years of conflict, Sudan split into two; the Republic of the Sudan, and the Republic of South Sudan. In the split South Sudan took 75 percent of the nation’s 470,000 barrels a day ouput of crude oil, whilst the North was left in control of the pipelines, the only manner of transporting the oil to the coast for export to other countries. Ever since the split the two young nations have been unable to agree as to how much South Sudan should pay Sudan for the privilege of using the oil pipes.
Sudan announced that it will seize oil transported through the pipes as payment for the use, until such time as an agreement is actually made. Based on this illegal announcement, they have been stealing oil from their southern neighbour ever since.
The latest victim to find itself caught in this feud is a black-and-red hulled tanker, the ETC Isis, which has been stranded 15 miles off the coast of Singapore for 150 days, carrying in its hold almost $60 million dollars’ worth of crude. South Sudan say the cargo was stolen, but Sudan still remain adamant that they have every right to seize and sell the oil.
According to Bloomberg this dispute has now entangled lawyers in London, shipowners in Cairo, buyers in Japan, dealers in the British Virgin Islands and Trafigura Beheer BV, the world’s third-biggest oil trader.
Mark Tan, a partner at the law firm Watson, Farley & Williams, based in Singapore, explained the situation, saying that “you have this dispute between two parties over the oil and the tanker is now stuck in no-man’s land.” Until the dispute is settled the oil cannot be unloaded.
Mind you, the Egyptian Tanker Co., who owns the tanker, are not complaining too loudly, and no wonder; the estimated daily rate for hiring a ship similar to the ETC Isis is about $8,645, and with the added fuel cost needed to keep the crude heated, they will receive about $1.8 million to do nothing for 150 days.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com