Tuesday, November 18, 2008
For years Somali pirates have been causing havoc in the Gulf of Aden, one of the world’s busiest shipping lanes, which connects Europe to Asia via the Suez Canal. But on Monday Somali pirates surpassed themselves. They have hijacked a Saudi supertanker along with its crew and oil cargo, and the incident may have really drastic consequences.
Over 300 metres long the Sirius Star is the largest ship ever seized by pirates. It was built in 2008 and is worth around 150 million dollars. In addition, the giant tanker’s capacity is two million barrels, which is more than one-quarter of Saudi Arabia’s daily output, so one may assume the oil cargo onboard Sirius Star is worth around 100 million dollars. Indeed, it is a king’s ransom for pirates.
News of the attack made crude oil prices jump on global markets, but it’s not only oil prices one should be concerned about.
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Pirates boarded the Sirius Star roughly 400 miles off the Kenyan coast. This is another record achieved by Somali pirates, as before they didn’t have the heart to travel that far from the coast. Before the recent attacks it was widely viewed that pirates operate only within 200 miles off the coast.
Maritime expert Mikhail Voitenko says the raid into the open sea is a dangerous sign. Now, piracy is no longer confined to a small area near Somalia, and armed groups can now capture large ships that do not need to find port regularly and can be held hostage in the open sea for a long time. This may lead to the spread of piracy into the Indian and eventually Atlantic oceans.
The recent increase in attacks is seriously threatening international seaborne trade.
Millions of tonnes of crude oil, petroleum products, gas and dry commodities like grain, iron ore and coal, as well as containers containing goods from Hi-Fis to toys are ferried through the Gulf of Aden and Suez Canal every month.
The situation has degraded so much that major operators of the world’s merchant fleet are now considering by-passing the Gulf of Aden and Suez Canal altogether. Industry experts say the alternative trade route, around South Africa’s Cape of Good Hope, would add some three weeks or more to a typical journey, pushing up costs for goods coming through Suez Canal, primarily for dry commodities and cargo going from Asia to Europe.
Meanwhile, two well-known shipping firms, one that specializes in gas and the other the world’s largest tug operator Svitzer, are already routing their vessels via the Cape of Good Hope.
Also Lloyd’s of London insurers say that pirate ransoms are now running too high and risk “catastrophic loss”, having skyrocketed from US $500,000 a year ago to millions of dollars. Consequently, insurance contributions have increased by 1,000 percent in 2008 alone.
So, if one doesn’t combat this threat it might be too late, but the leaders of the Gulf of Aden and Suez Canal countries don’t really seem to be concerned of the problem. On the contrary, on November 20 they meet in Cairo to discuss some countries’ increasing military presence in the region, which “threatens the security of some Arab states”, yet there will be no talks on piracy.
This article was posted: Tuesday, November 18, 2008 at 11:27 am