As Israel-Iran war escalates, tankers don't know what to do. They pause, make a U-turn, zig-zag around Strait of Hormuz
Washington's decision to join Israel's attacks on Iran has stoked fears that Iran could retaliate by closing the strait between Iran and Oman through which around 20 per cent of global oil and gas demand flows.
Fears that Iran could shut the strait has spurred forecasts of oil surging to $100 a barrel. Both Brent and West Texas Intermediate crude hit fresh five-month highs on Monday in choppy trade as investors weighed the potential risks to supply.
Freight data shows that shipping rates for supertankers, which can carry 2 million barrels of oil, have also soared, more than doubling in a week to over $60,000 a day.
On Sunday, the Coswisdom Lake, a very large crude carrier supertanker made a U-turn and headed south after reaching the strait, a Reuters report, citing Kpler and LSEG data, said. A day later, the carried turned around and resumed its journey towards the port of Zirku in the United Arab Emirates.
The South Loyalty, also a VLCC, made a similar U-turn and remained outside the strait on Monday, LSEG data showed. It was scheduled to load crude from Iraq's Basra terminal, according to Kpler data and two shipping sources.
The Coswisdom Lake was scheduled to load crude at Zirku for delivery to China. It was chartered by Unipec, a trading arm of China's state-run Sinopec, LSEG and Kpler data showed.
Sinopec did not respond to a request for immediate comment.
There have also been changes to how tankers are navigating the area, with a cluster of them sailing closer to Oman, while mainly Iranian-flagged vessels use Iran's local waters, shiptracking data on the MarineTraffic platform showed on Monday.
The chemical tanker Kohzan Maru was sailing towards the strait before changing course to remain in the Gulf of Oman. The oil tanker Red Ruby and chemical carrier Marie C were also sailing towards the strait before opting to drop anchor off the UAE port of Fujairah, the data showed. All three en route for loadings.
Shipowners are trying to minimise time that vessels spend inside the Strait of Hormuz due to the conflict, KY Lin, spokesperson at Taiwan's Formosa Petrochemical Corp, said on Monday. "Vessels will only enter the region when it is nearer to their loading time," he said.
Japanese shipping firms Nippon Yusen and Mitsui O.S.K. Lines said on Monday they continue to transit the strait but have instructed their vessels to minimise time spent in the Gulf.
Several oil traders and analysts told Reuters that they had been warned to expect possible shipping delays as vessels wait for their turn outside the area.
"Diversifying sources of supply and shipping routes and learning from past disruptions like the Red Sea are critical," said Leon Alexander, partner at global law firm Clyde & Co.
(With inputs from Reuters)
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