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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Pirates Threaten Oil And Gas Shipping In The Red Sea

In November 2015, UK-based maritime security consultancy Ambrey Risk warned that the drop off in media reports of piracy in the Gulf of Aden should not make shipping operators lower their guard and think that their cargo is now risk-free and safe.

Now, almost a year later, a recent spate of attacks on navy vessels and merchant tankers in a narrow strait off Yemen is raising concerns over the security of commercial oil and gas shipping in the vital Bab al-Mandeb Strait, the waterway of global trade between the Mediterranean, the Suez Canal and the Indian Ocean. The strait links the Red Sea with the Gulf of Aden.

Last week, an LNG tanker of shipping the Teekay group “experienced a suspected piracy attack whilst off the coast of Yemen”, according to a spokesman for the group, describing what was the first attack on a commercial ship in the area in three months.

Although UK maritime security firm MAST said at the time that it was “unclear” whether it was a terrorist attack or piracy, the attack highlights the substantial risks that oil and gas trade in the region faces, with renewed piracy attacks as well as attacks connected with the civil war raging in Yemen.

Yemen has been the site of a proxy war between Saudi Arabia and Iran after Iran-allied Houthi rebels forced Yemen’s President Abd-Rabbu Mansour Hadi to flee to Saudi Arabia, Yemen’s neighbor to the north. The international community recognizes Hadi as Yemen’s legitimate leader. Since March 2015, the Houthi rebels and loyalists to Hadi have been fighting a civil war in Yemen, and forces in a Saudi-led Arab coalition are trying to restore Hadi to power.

While experts are divided on who is behind the latest attack on Teekay’s LNG tanker, the Bab al-Mandeb Strait has seen oil trade steadily growing in recent years, meaning even more oil is at risk. According to the U.S. Energy Information Administration (EIA), trade in crude oil and petroleum products at this chokepoint jumped to nearly 4.7 million barrels per day in 2014, almost doubling from the 2.7 million barrels in 2010.

Now, maritime security experts and political observers are warning companies to be more vigilant with their cargoes crossing the narrow strait. Related: Can Oil Markets Survive An OPEC Implosion?

Tensions have also escalated in the past weeks after U.S. Navy ships were threatened by missiles off the Yemeni coast.

Two experts, who were reached by the Financial Times before last week’s attack on the commercial LNG cargo, had offered contrasting views on whether Iran might have been using its links with the Houthis to try to disrupt trade in the area.

Former UK ambassador to Iran and an associate fellow at the Chatham House think-tank, Richard Dalton, said that Iranians are “very pro-free passage” for waterways and are hostile only when someone threatens to cut off their oil-exporting-lifeline—the Gulf.

On the other hand, Andreas Krieg, assistant professor at the Defence Studies Department at King’s College, said that it is probable that Iranians may use the Yemeni port, Hodeidah, to smuggle weapons from Sudan via Djibouti, which would be “a more serious concern for Saudi than merely the interruption of trade in the region”. Related: BP And Shell Optimistic The Market Is Turning

Regarding the attack on Teekay’s LNG tanker, Michael Edey, head of operations with UK security company Dryad Maritime, told Reuters: “I would suggest that this attack was by locals from southern Yemen rather than the Houthis.”

It was Dryad Maritime that sounded cautious optimism on reduced maritime crime in the global “hot spots” in a Q3 report from 14 October. Still, the company warns that the conflict in Yemen and the incidents in the Red Sea are evidence that shipping companies continue to operate in some “dangerous waters”.

Just a few days before this report, Dryad Maritime had issued security advice for commercial vessels at the Bab al-Mandeb Strait to operate under “a heightened state of alert” because they may inadvertently come under fire that may not be directed at them.

As for the latest incident, whoever the responsible party, the global oil and gas tanker trade should not overlook the security issues in the narrow but vital strait off the Yemeni coast.

By Tsvetana Paraskova for Oilprice.com

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  • Captain America on November 04 2016 said:
    Time to Break Out the FIFTY CALIBER Machine Guns and FIFTY CAL....SNIPERS !

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