Oil markets finally got some…
As oil prices fall back…
Pirate activity in the South China Sea around Singapore seems to be on the up in recent years, and two tankers have been taken in the last month from the Malacca Strait, through which a quarter of all sea borne oil is transported. Shipping operators fear that insurance premiums for ships working in the area will shoot up as a result.
On the 10th of October a tanker full of gasoil was hijacked near to Pulau Aur, Malaysia, and not released until all cargo had been transferred across to a waiting tanker. Then more recently, on the 7th of November, pirates took another tanker in the same region carrying marine gasoil, and didn’t let the crew or the ship go until its cargo had been stolen. Over the last two years three other tankers have suffered similar attacks.
The GPT-21 tanker.
Related article: The Real Reason Behind China’s Military Expansion
Reuters reports that according to shipping tracking data, the tanker taken on the 7th of November was the 3,254 deadweight tonne (dwt) GPT-21 operated by Singapore firm Global Unique Petroleum, which one shipbroker calculates was carrying $2.7 million of gasoil cargo.
Mark Pearce, from Drum Cussac, the international risk consultant, warned that “given that previous incidents occurred in clusters this could be the start of a trend.”
A security source working in the region told Reuters that they were not sure how many gangs were involved in the hijackings, but that it was clearly the work of a syndicate, indicated by the level of planning and sophistication that went into the attacks.
The Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) has suggested that the gangs may well have men on the inside, working onboard the tankers, or working in the company to pass on information about the ship, tis cargo, and the planned route.
Pearce explains that hijackings in the area have involved “the seizure of tug boats and barges for resale on the black market and the seizure of tankers so that their cargo, often marine gasoil, can be transferred and sold on the black market.”
Related article: Why has Russia Really Charged Greenpeace Protestors with Piracy?
Tom Fulford-Smith, the marine divisional director of international insurance at broker Cooper Gay, said that “if insurers see one or two incidents, they are going to wonder if it's going to happen again,” and that will likely see premiums begin to rise.
The International Maritime Bureau (IMB) notes that pirate activity seems to be spiking just as it falls to its lowest level since 2006 in the rest of the world.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com