Yemen Conflict Adds to Worries for Ships Dodging Pirates, Terror

By Naomi Christie and Anthony DiPaola | March 30, 2015

When it comes to world trade, a 17-day shortcut trumps terror, piracy and now bombs.

That’s the time a supertanker saves by using the Bab el-Mandeb waterway that skirts Yemen at the southern tip of the Arabian Peninsula, rather than sailing around Africa. Shipping groups say there’s no sign yet that the sea lanes are disrupted after Saudi Arabia and its allies started a bombing campaign against Shiite rebels in Yemen.

Vessels use the waterway to reach the Suez Canal, a route that handles about 20 percent of all trade and almost 7 percent of oil and fuel cargoes. Shipments continued after terror attacks off Yemen in 2000 and 2002 and expanded since at least 2009 even as piracy spread. Europe, the U.S. and other nations operate military craft in the area and the country’s coast has the highest possible risk rating for insurers.

“There’s no way that the Bab el-Mandeb could ever be closed because it’s too important,” Andreas Krieg, assistant professor at the Defence Studies Department of King’s College London, said by phone Thursday. “A huge security industry has evolved around exactly that area because it is such an important point for world trade.”

Bimco, the biggest trade group for ship owners, said on Friday, March 27 that there’s been no disruption so far, while cautioning that risks could rise. EU Navfor, Europe’s naval force combating piracy in the region, said Thursday there’s been no reported disturbance to trade. Japan’s two biggest publicly traded ship owners said they’re not altering schedules for now.

General cargo movements to the port of Aden were disrupted for a third day on Friday, Harbor Master Shekib Abdelwahed said by phone. Other shipments at the port were normal, he said.

Saudi Coalition

Sailing to Rotterdam, Europe’s oil-trading hub, from Saudi Arabia, the biggest crude exporter, takes about 22 days going through the Suez Canal, according to data compiled by Bloomberg. Going around Africa takes 39 days.

Goods from China shipped to the Dutch port from Shanghai, the biggest export facility, are delivered about 10 days faster going through the canal than around Africa. Smaller ships can use the Panama Canal, but the voyage still isn’t as quick as going through the Suez Canal.

The link is used for cargoes to the U.S. East Coast and for shipments of crude and fuel from parts of Europe to Asia.

Listed Area

Yemen and parts of the Gulf of Aden are deemed listed areas by the Joint War Committee, which advises the world’s insurers. Other such areas include Iran, Iraq and Libya. There have been no “cover issues” since the escalation in Yemen, Andrew Bardot, secretary of the International Group of P&I Clubs in London, said by e-mail. His group’s members protect ship owners against risks including oil spills.

The U.S. said al-Qaeda was responsible for attacks in 2000 on the USS Cole, an American naval ship, and the Limburg, an oil tanker, two years later.

EU Navfor has five ships in the area to escort merchant vessels that are at risk of piracy, according to its website. Iran’s navy foiled a pirate attack on one of the country’s tankers, state media reported March 25. The U.S. Fifth Fleet is based in Bahrain, about four days away by sea.

About 3.8 million barrels of crude and fuels were carried through the Bab el-Mandeb strait each day in 2013, out of 56.5 million barrels shipped by sea globally, according to data from the U.S. Energy Department. EU Navfor estimates about 20 percent of all trade is shipped through the Gulf of Aden, according to its website.

“We are far from any disruption just now,” Richard Dalton, a research fellow at Chatham House in London who monitors Middle East affairs, wrote in an e-mail Thursday. The “threat of closure rises if forces are present that could overwhelm defensive/deterrent measures. No such forces are in theater.”

–With assistance from Maher Chmaytelli in Paris and Kiyotaka Matsuda in Tokyo.

Topics USA Europe Energy Oil Gas London

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