Tanker owners keeping vessels away from Middle East

Oil tanker owners have been avoiding sending their ships to Fujairah, the Middle East’s main refuelling hub, after recent attacks on vessels in the past two months .

Demand for ship fuel at UAE coastal shipping hub Fujairah has declined.

Fujairah was seeing a significant drop in demand owing to war-risk premiums” that are levied by ship insurers, sources said. The root cause of the slump — whether ships are avoiding the Middle East altogether or just skipping Fujairah — was not completely clear. Frontline temporarily paused trading from the Persian Gulf.

Local officials said that there had been no slump in refuelling from facilities at the port itself, but carriers are also supplied at anchorage areas — where four tankers were attacked in early May — and it is there that brokers and traders were reporting a drop-off. Brokers and traders said there had been a drop of about 15% since the May attacks, although their estimates varied considerably. One broker said bunker demand had declined by more than 30%, to as little at 500,000 tons a month.

Facts Global Energy estimated that sales had fallen to about 650,000 tons a month, down about 13% compared with the period before the incidents.

There are few alternatives near to Fujairah with the same range of services. Vessels that go to Fujairah solely for fuel and servicing would be more likely go elsewhere, the traders said. However, a large proportion of tankers sailing through Hormuz to load crude or fuel in the Gulf will probably keep visiting the port as those ships will have paid higher insurance premiums already, traders said.