Pirates and Oil
The news just became worse for oil companies and petrostates alike: Somali pirates -- the scourge of cargo handlers on Africa's east coast -- have seized an aircraft-carrier size oil tanker steaming 500 miles out to sea.
It's not known publicly how much oil was aboard, but the Saudi-owned carrier has a capacity of 2 million barrels.
The Somalis have menaced shipping along the coast for some time, forcing pilots to go all the way around the southern tip of Africa instead of the Suez Canal. But bringing down an oil tanker 500 miles out to sea is a wholly different affair.
Is it possible simply to seize such a large ship unaided by the crew? (Here is a decent YouTube item on the pirates and their home base.) The U.S. and French navies are reportedly stepping up patrols. But the latest news shows that the pirates just widened their playing field.
It's not known publicly how much oil was aboard, but the Saudi-owned carrier has a capacity of 2 million barrels.
The Somalis have menaced shipping along the coast for some time, forcing pilots to go all the way around the southern tip of Africa instead of the Suez Canal. But bringing down an oil tanker 500 miles out to sea is a wholly different affair.
Is it possible simply to seize such a large ship unaided by the crew? (Here is a decent YouTube item on the pirates and their home base.) The U.S. and French navies are reportedly stepping up patrols. But the latest news shows that the pirates just widened their playing field.
3 Comments:
What'll you bet we see some hyperventilation in the markets over this? Now that the pirates are going after oil tankers...
Hi Patton: if it weren't for all the other events buffeting oil prices, you'd be right. It looks like the market regards pirates as just another nuisance. Definitely worth watching however. Best Steve
Dear Steve, good work with the blog.
I think the answer is that insurance premiums for ships going near Somalia are going to go up and private security companies are going to try to offer their services.
The easy answer to the problem of Somalia is that it needs an effective, centralised government, which doesn't seem likely to happen anytime soon. There is insufficient domestic or external will to make it work - yet.
As can be seen with Iraq and Afghanistan, the costs of trying to impose a government on a country are prohibitively high and the chances of any country wanting to engage with Somalia in this way are minimal.
Best, Ed.
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