The recent attack on two Bahri-owned VLCCs and Saudi Aramco’s halting of oil flows through the Bab el-Mandeb strait may have rattled the tanker market, but any impact on the sector is likely to be limited, says analyst Alphatanker.
The analyst notes that Saudi Aramco has stated its action was a temporary measure and, given the size of the various naval fleets patrolling the region, normal service should resume sooner rather than later.
No other charterers have followed Saudi Aramco’s lead and insurance premiums have not increased. The impact should remain limited, says the analyst, unless there is a significant escalation in tensions in Yemen.
Security risk
Alphatanker says perhaps the highest security risk lies not with tanker traffic in the strait but Saudi Aramco’s 400,000 barrels per day Jizan refinery, which is due to be inaugurated later this year.
The refinery is positioned around 50 kilometres from the Yemen border and represents the last part of Saudi Aramco’s ambitious refinery expansion plans.
Saudi Arabia has said that it resumed oil exports through the Red Sea via the Strait of Bab el-Mandeb over the weekend. It temporarily halted oil shipments through the lane on 25 July after attacks on two VLCCs by Yemen’s Iran-aligned Houthi movement.
“The decision to resume oil shipment through the strait of Bab el-Mandeb was made after the leadership of the coalition has taken necessary measures to protect the coalition states’ ships,” Saudi Energy Minister Khalid al-Falih said in a statement.
Saudi Aramco added: “The company is careful to continue monitoring and evaluating the current situation in coordination with the relevant bodies and take all necessary procedures to ensure safety.”
Minor damage
One of the two Bahri-owned VLCCs identified at the centre of the attack on 25 July sustained “minor” damage.
Both VLCCs were fully laden at the time. There were no injuries to the either ship’s crew and no pollution.
The Bab el-Mandeb strait, which runs close to the shoreline of Yemen, is the main shipping lane linking the Red Sea with the Indian Ocean.
It is considered one of the world’s most strategic waterways and is heavily patrolled by United Nations naval forces.
The Houthi movement has in the past threatened and attacked vessels carrying Saudi oil because of the active role the country is playing in Yemen’s ongoing civil war.
