Lloyds Adds Guyana to Risk List

Lloyds has added Guyana to its risk list, which also features the Red Sea and the Black Sea due to heightened military tensions.

While there is no immediate threat to oil transportation around Guyana, the recent flare-up in bilateral relations with Venezuela was considered sound reason enough for the addition.

The dispute between the two neighbors dates back to the late 19th century when an arbitration court gave control of a region called Essequibo to Guyana. It represents two-thirds of the country’s total territory.

The dispute flared up as the U.S. lifted oil sanctions on Caracas temporarily in a bid to increase the supply of heavy crude for Gulf Coast refineries.

Venezuela held a referendum in early December regarding its claim of sovereignty over Essequibo and the majority voted in favor. This sparked worry about a possible invasion and indeed Venezuelan troops were amassed by the border with Guyana. Urgent diplomatic efforts followed, leading to talks between the two heads of state.

These ended on a positive note, with both pledging to not resort to force to support their respective claims. Even so, Lloyds has deemed it appropriate to warn shippers moving cargos in the region that the Guyana exclusive economic zone may not be the safest place in the world.

The news comes as global shippers begin avoiding the Red Sea and the Suez Canal due to the string of missile and drone attacks on vessels in the area coming from the Yemeni Houthis.

Earlier this week BP, too, said its tankers will no longer use the route until the attacks end. That prompted a fast reaction from the U.S. which announced a coalition to beef up international military presence in the Red Sea to support better security for the ships still using the route that handles some 14% of global trade.

By Charles Kennedy for Oilprice.com

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