Shipowners hold back from taking bookings for Middle East cargoes

A large number of shipowners were not accepting bookings for Middle East cargoes on Friday, citing lack of clarity on safety after Thursday’s attacks on two tankers in the Gulf of Oman, Singapore-based shipbrokers and Asian market sources said.

The move will not have an immediate impact on crude flows as charterers are not in urgent need of vessels and crude supply was ample, they said.

A few shipowners were still willing to consider spot bookings for the Middle East, including mainly Greek companies who sought higher premiums and extra crew fees to undertake the voyage, shipbrokers said.

Most owners were in a wait-and-watch mode and at least one major Asian shipowner was still considering halting its vessels from calling at ports in the Middle East, a company executive said.

“There is too much steam today and many owners are not ready for calling Persian Gulf ports today. If we check the market today for ships, owners will be bullish,” a Singapore-based VLCC charterer said.

Some shipowners were hesitant to call at Fujairah, while others said that calling at Persian Gulf ports had not been ruled out and there were always some vessels willing to take the risk.

Other owners said war risk premiums must be charged to the charterer, indicating that risk appetite for Middle East loadings varied widely.

War risk

Clean tanker fixtures have started to include ‘Additional War Risk Premium’ annotations, and higher freight rates will likely be passed on to the charterer.

For instance, the Long Range 2 vessel Kastelorizo was listed for loading 75,000 mt of naphtha from the Persian Gulf to Japan with options and AWRPs, according to fixture lists seen by S&P Global Platts.

One of the tankers that caught fire on Thursday was the LR2 Front Altair carrying a naphtha cargo for Taiwanese oil refiner CPC Corp.

The UK War Risks Club, which provides specialist insurance for ships, told members that “although full details of the Gulf of Oman incidents are yet to be confirmed, there does appear to be a greatly increased threat to ships trading in the region”.

The club, managed by insurance provider Thomas Miller, said it was likely that additional premium rates will increase with immediate effect and it was in discussions with reinsurers.

The UK P&I Club, also part of the same group, told its members to exercise extreme caution in the Sea of Oman region. It had previously assisted one of its members involved in the sabotage incident in the anchorage of Fujairah port in May.

In Thursday’s incident, two vessels were attacked — the chemical tanker Kokuka Courageous, as well as the Front Altair.

US naval forces in the region received distress calls from the Front Altair and Kokuka Courageous at 6:12 am local time and 7 am, respectively.
Source: Platts