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Oil Tanker Spotted in Risky Active Pass Alarms Activists

Oil Tanker Spotted in Risky Active Pass Alarms Activists

Officials promise no repeats. But advocates say the incident raises new concerns about regulation of tankers in BC’s waters.

On a calm Friday afternoon in late April, avid naturalist Barry Swanson was watching Active Pass from his home on Galiano Island, keeping an eye out for the pod of southern resident killer whales that swim by every couple of days.

Instead of orcas, he was shocked to see an oil tanker traversing the narrow channel.

The MV Kassos was sitting low in the water, its hull heavy with petroleum products bound for Los Angeles.

Swanson is the co-founder of the non-profit Salish Sea Orca Squad, a group that works to raise awareness about the region’s killer whales. In an interview with The Tyee, he says he was very concerned to see dangerous cargo being shipped through the narrow waterway.

Active Pass sits between Mayne and Galiano Island. The channel is deep but narrow — 302 metres wide at its skinniest — and features strong currents, rip tides and a blind corner, according to Fisheries and Oceans Canada. It’s also a route favoured by BC Ferries, connecting Tsawwassen to Swartz Bay and the mainland to the Southern Gulf Islands.

It’s extremely unusual for an oil tanker to take Active Pass instead of the neighbouring Boundary Pass, favoured by almost all other commercial routes for its wider, calmer waters. Swanson says he’s never seen an oil tanker take the pass before.

“When you have a tanker travelling through these waters… there is always tremendous danger with dangerous goods being spilt in any amount. It would be a disaster for that to happen,” Swanson says.

…click on the above link to read the rest of the article…

Oil Tanker Owners Pay to Move Crude in Wake of Supply Cuts

Oil Tanker Owners Pay to Move Crude in Wake of Supply Cuts

Supertankers delivering 2-million-barrel shipments of the kingdom’s oil to China are losing $736 a day for the privilege, according to data from the Baltic Exchange in London on Tuesday. While owners might, in practice, be able to mitigate such losses by ordering captains to sail the vessels slower, the reality is that some ships are losing money on Middle East-to-Asia deliveries, according to Halvor Ellefsen, a shipbroker at Fearnleys.

“Even the most economical ships out there are struggling to get positive numbers,” he said. “It’s carnage right now.”

While tanker rates weren’t particularly strong up to the end of last year, they weren’t disastrous either. What really seems to have tipped the balance is when Saudi Arabia, wary of oil demand risks posed by Covid-19, announced that it would unilaterally cut 1 million barrels a day of production to support crude prices. That removed a big chunk of seaborne shipments in a market where cargoes were already curtailed.

It also came at a time when the supply of ships was being bolstered. Huge numbers of tankers had been used to store crude at sea when an oil market glut built up last year, and that’s now tumbling. Since its peak last year, about 132 million barrels of oil are no longer being stored at sea, enough to fill 66 supertankers, Vortexa data shows.

Traders also reported lower demand over the past few days from some buyers in Asia where refineries will soon start carrying out seasonal maintenance programs and therefore need fewer crude cargoes.

…click on the above link to read the rest of the article…

Tanker Operators Suspend Travel Through Strait Of Hormuz

Tanker Operators Suspend Travel Through Strait Of Hormuz

Following Iran’s decision to lob missiles at US-Iraqi bases last night, several major tanker operators have suspended sailing through the Straits of Hormuz, the site of several tanker attacks last year.

Petrobras, Bahri – Saudi Arabia’s state-run tanker operator – and other tanker companies have suspended sailing through the Straits of Hormuz, WSJ reports, citing unidentified people familiar with the matter.

Meanwhile, Gulf officials are already trying to convince the world that there’s nothing to worry about in what’s essentially a tinderbox inside another tinderbox. United Arab Emirates’ Energy Minister Suhail al-Mazrouei said on Wednesday he saw no immediate risk to oil passing through the critical gateway through which 20% of the global supply of crude travels. al-Mazrouei made the comments on the sidelines of a conference in Abu Dhabi, the UAE capital.

The source of their concerns is clear: Iran carried out its “retaliation” for the killing of General Suleimani last night – though the Pentagon has confirmed that there have been no American casualties from Iran’s strikes. However, many fear that Iran isn’t finished with its retaliation. 

Mazrouei added that OPEC was not discussing any precautionary steps at the moment, but would re-evaluate the situation if a supply shortage emerged, according to Reuters. He said earlier that the global oil market was well supplied.

Oil prices initially moved higher after last night’s attacks, but prices have since settled, and the market largely ignored the news about the tanker suspensions, as it was already largely priced in.

On Tuesday, Washington warned about “the possibility of Iranian action against US maritime interests” in the Middle East.

“U.S. commercial vessels are advised to exercise caution and coordinate vessel voyage planning for transits of the Persian Gulf and nearby waterways,” the U.S. Maritime Administration said in a statement on its website.

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Russia’s Sound Proposal for Gulf Peace

Russia’s Sound Proposal for Gulf Peace 

There is an eminently reasonable and feasible way to avoid conflict in the Persian Gulf, and to secure peace. The principles of multilateralism and international law must be adhered to. It seems almost astounding that one has to appeal for such obvious basic norms.

Fortunately, Russia has presented a roadmap for implementing a security concept in the vital waterway based on the above principles.

Russia’s deputy envoy to the United Nations, Dmitry Polyansky, outlined a possible international coalition to provide security for commercial shipping through the strategically important Persian Gulf. The narrow outlet accounts for up to 30 per cent of all globally shipped oil on a daily basis. Virtually every nation has a stake in the safe passage of tankers. Any disruption would have huge negative consequences for the world economy, impacting all nations.

The Russian proposal, which has been submitted to the UN Security Council, is currently being considered by various parties. Crucially, the security concept put forward by Moscow relies on the participation of the Gulf nations, including Iran. Rather than being led by an outside power, the Russian proposal envisages a region-led effort.

This multilateral arrangement for cooperation between nations is solidly within the principles of the UN Charter and international law. Potentially, it can build trust and positive relations, and thereby reduce the climate of tensions and uncertainty which have intensified over recent months, primarily between the United States and Iran.

Washington has blamed Iran for several sabotage incidents on commercial shipping since June. The Americans have not provided any proof for their claims. Iran, for its part, denies any malfeasance and instead has pointed to “malign conspiracy”aimed at stoking tensions, or worse, precipitate an all-out military confrontation between the US and Iran. Significantly, too, the problem of alleged sabotage and danger to shipping followed the increased deployment of US forces in the region during May, ostensibly to counter anticipated “Iranian aggression”.

 …click on the above link to read the rest of the article…

“No Quid Pro Quo”: UK Rejects Iran’s Offer To Swap Seized Tankers

“No Quid Pro Quo”: UK Rejects Iran’s Offer To Swap Seized Tankers

Britain this week has rejected an Iranian offer to swap each other’s captured tankers, as the crisis involving the British-flagged Stena Impero and the Iranian oil filled Grace 1 previously captured by Royal Marines off Gibraltar on July 4 has remained deadlocked. 

Most observers agree it’s virtually a “foregone conclusion” that the tankers will ultimately be traded for one another, however, UK officials are still stalling over what they say are the norms of international law.  

“There is no quid pro quo,” Foreign Secretary Dominic Raab asserted on BBC radio. “This is not about some kind of barter. This is about the international law and the rules of the international legal system being upheld and that is what we will insist on.”

UK Royal Marine aboard the Grace 1. Image released by the Ministry of Defence, via BBC.

In boarding the Grace 1 on July 4 just as it sought to enter the Mediterranean, British authorities claimed to have thwarted illegal EU sanctions busting related to Syria, as the Grace 1 was reportedly bound for the Syrian port of Baniyas to offload some 2 million barrels of oil to the fuel-starved, war-torn country. Leaders in Tehran accused the UK of simply doing America’s bidding, however. 

Last Wednesday Iran’s president initially suggested an equal good faith swap of sorts. He proposed that should the UK release the Grace 1, Iran would do likewise and immediately release the Stena Impero. 

“If Britain steps away from the wrong actions in Gibraltar, they will receive an appropriate response from Iran,” Rouhani said Wednesday addressing a weekly cabinet meeting. The words came the same day Britain had reportedly sent a mediator to Iran seeking to negotiate the ship’s return and its 23 detained crew members. 

 …click on the above link to read the rest of the article…

UK Releases Footage Showing Warship Escorting Tankers In Gulf

UK Releases Footage Showing Warship Escorting Tankers In Gulf

The UK Royal Navy has now fully initiated its planned-for escort mission to British-flagged tankers transiting the increasingly dangerous Strait of Hormuz, following Iran’s IRGC seizure and continued detention of the Stena Impero and its crew. 

Britain’s Defence Ministry said in a statement Thursday that “the Royal Navy has been tasked to accompany British-flagged ships through the Strait of Hormuz, either individually or in groups, should sufficient notice be given of their passage.”

Among the first batch of photos showing a British warship escorting a UK-flagged vessel through the Strait of Hormuz. Image source: UK Ministry of Defence/Sky News

Citing “safety” and “reassurance” for vessels transiting the strait, the statement added, “Freedom of navigation is crucial for the global trading system and world economy, and we will do all we can to defend it.”

Sky News reported that a Royal Navy Type 23 frigate already stationed off Bahrain since April, the HMS Montrose, was the first warship to offer escort Thursday. The HMS Duncan, which is a larger ‘Type 45’ frigate, is reportedly en route to assist the Montrose. 

This follows UK Foreign Secretary Jeremy Hunt’s Monday announcement of an initiative for a “European-led maritime protection mission to support safe passage of crew and cargo” in the Persian Gulf. The goal, he described, would be to provide safe passage for international vessels in the vital oil transit waterway, protecting them from Iranian “state piracy”.

 …click on the above link to read the rest of the article…

The Mysterious “Sabotage” of Saudi Oil Tankers: a Dangerous Moment in Trump’s Escalating Conflict With Iran

The Mysterious “Sabotage” of Saudi Oil Tankers: a Dangerous Moment in Trump’s Escalating Conflict With Iran

Saudi Arabia’s claim that two of its oil tankers have been sabotaged off the coast of the UAE is vague in detail – but could create a crisis that spins out of control and into military action.

Any attack on shipping in or close to the Strait of Hormuz, the 30-mile wide channel at the entrance to the Gulf, is always serious because it is the most important choke point for the international oil trade.

A significant armed action by the US or its allies against Iran would likely provoke Iranian retaliation in the Gulf and elsewhere in the region. Although the US is militarily superior to Iran by a wide margin, the Iranians as a last resort could fire rockets or otherwise attack Saudi and UAE oil facilities. Such apocalyptic events are unlikely – but powerful figures in Washington, such as the national security adviser John Bolton and secretary of state Mike Pompeo, appear prepared to take the risk of a war breaking out.

Bolton has long publicly demanded the overthrow of the Iranian government. “The declared policy of the United States should be the overthrow of the mullahs’ regime in Tehran,” he said last year before taking office.

“The behaviour and the objectives of the regime are not going to change and, therefore, the only solution is to change the regime itself.”

Bolton and Pompeo are reported to have used some mortar rounds landing near the US embassy in Baghdad in February as an excuse to get a reluctant Pentagon to prepare a list of military options against Iran. These would include missile and airstrikes, but it is unclear what these would achieve from the US point of view.

 …click on the above link to read the rest of the article…

Tight Oil Markets Could Be About To See A ‘Violent’ Price Spike

Tight Oil Markets Could Be About To See A ‘Violent’ Price Spike

VLCC

Supply disruptions in the Middle East on top of an already tight crude market could send oil prices violently upward, according to Rystad Energy.

Two Saudi Arabian oil tankers were reportedly attacked off the coast of the United Arab Emirates (UAE) this weekend, sending crude futures sharply up Monday morning.

Commenting on the incident, Bjørnar Tonhaugen, Head of Oil Market Research at Rystad Energy, says:

“In the short term, the perceived risk of supply disruptions from the area will only add to the premium of short-dated oil contracts compared to deferred contracts on the futures curve, which are already trading at a high premium.”

The tightness in prompt supplies is caused by declines in production from Iran and Venezuela, along with ongoing OPEC cuts, outages in Russia owing to the Urals contamination, maintenance in Kazakhstan, plus planned maintenance in the North Sea during the summer months.

“The oil market is reacting today not because the physical market suddenly has lost more oil supplies, but because of risks that the market may lose more oil in the coming weeks and months given the heightened risk of supply disruptions from the critical Persian Gulf region. Raising tensions even higher, news flows suggest the latest incident might be related to the conflict between Iran and the US, which puts the Strait of Hormuz in play,” Tonhaugen said. 

The incident occurred near the Strait of Hormuz, the world’s most important oil artery. Around 40% of the world’s traded crude oil is transported through the waterway between Iran to the north and UAE/Oman to the south. Approximately 90% of Saudi Arabian crude exports and 75% of Iraqi exports pass through this shipping lane, in addition to all oil exports from Iran, Kuwait, Qatar and Bahrain.

 …click on the above link to read the rest of the article…

Iran Shuts Off Oil Tanker Tracking System As US Sanctions Start 

The US on Monday (Nov 5) is reimposing disciplinary measures targeting Iran’s oil, shipping, insurance, and banking sectors in what US Secretary of State Mike Pompeo called “the toughest sanctions ever placed” against Iran. In response, Tehran has reportedly turned off all oil tanker tracking systems as the sanctions take effect today.

Analysts at TankerTrackers.com, a watchdog that monitors production, refinement, shipping, and trading of crude oil on a global scale, revealed in late October all Iranian tanker vessels turned off their transponders to avoid international tracking for the first time since 2016.

“It’s the first time I’ve seen a blanket black-out. It’s very unique,” TankerTrackers co-founder Samir Madani told Sputnik News.

Madani said with the transponders turned off, the vessels can only be monitored using private satellite imagery. He believes that such a shift to lesser transparency is a ploy by Iran’s leadership to keep the international supply chains open amid US sanctions.

“Iran has around 30 vessels in the Gulf area, so the past 10 days have been very tricky, but it hasn’t slowed us down. We are keeping watch visually,” said co-founder Lisa Ward.

The analysts suggested that going dark could pose significant problems in pinpointing the date when a tanker loaded its crude cargo.

Between 2010 and 2015, when Iran was slapped with international sanctions, its oil industry discovered that it could keep crude on tankers off the Gulf coast to avoid supply chain disruptions.

According to TankerTrackers.com’s research, there are currently six tankers with a total capacity of 11 million barrels moored offshore as floating storage, which allows Iran to continue deliveries.

Iran is the third-largest oil producer in OPEC, and the country’s First Vice-President Eshaq Jahangiri revealed in late October that Tehran had been exporting 2.5 million barrels per day over the past few months, said Sputnik.

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25 Oil Tankers Stuck In Gulf, Unable To Offload Due To Harvey Port Closures

25 Oil Tankers Stuck In Gulf, Unable To Offload Due To Harvey Port Closures

According to ship-tracking data compiled by Bloomberg, coupled with MarineTraffic real-time tracking, at least 25 tankers carrying almost 17 million barrels of imported crude oil are drifting near Texas and Louisiana ports, unable to offload because of closures from Tropical Storm Harvey.

Source: MarineTraffic

A Bloomberg further details, 20 Aframaxes, 3 VLCCs, 2 Suezmaxes are currently waiting off Texas ports of Corpus Christi, Freeport, Texas City, Houston and Galveston, as well as off Sabine Pass and Lake Charles, Louisiana. This is three more than the 22 ships that were “drifting” on August 28.

Follows a description of the stuck tankers’ cargo:

  • 6m bbl Mexican crude, including Maya
  • 4m bbl Saudi oil
  • 3.3m bbl Venezuela crude
  • 2m bbl from Iraq
  • 500k bbl Castilla from Colombia
  • 500k bbl Ostra from Brazil
  • 500k bbl Bonga from Nigeria

Additionally, here is a current status update of the various ports:

Corpus Christi:

  • Port shut since Aug. 24, sees return to normal operations by Sept. 4
  • Refineries planning restarts for this week:
    • Flint Hills may restart as soon as Tuesday
    • Valero, Citgo preparing for restart
  • Oil imports via Corpus Christi in 2016 were 225.8k b/d
    • Top suppliers, according to EIA data compiled by Bloomberg:
    • Venezuela 31%
    • Saudi Arabia 18%
    • Iraq 13%

Freeport:

  • Port shut
  • Phillips 66 Sweeny (247k b/d) shut
  • Oil imports via Freeport in 2016 were 128.6k b/d, of which 98% came from Venezuela and the rest from Saudi Arabia: EIA data

Houston:

  • Port of Houston still shut, no timeline for reopening
  • Shell Deer Park (316.6k b/d capacity) shut; LyondellBasell (263.8k b/d) cuts rates; Exxon Baytown complex (560.5k b/d), Exxon Beaumont (344.6k b/d), Marathon Galveston Bay (451k b/d) in process of shutting down
  • Oil imports via Houston, largest U.S. port for imported oil, 574.7k b/d in 2016, according to EIA; top suppliers:
    • Mexico 51%
    • Saudi Arabia 15%
    • Colombia 13%

…click on the above link to read the rest of the article…

Oil Tankers Are Filling Up As Global Storage Space Runs Low

Oil Tankers Are Filling Up As Global Storage Space Runs Low

The rebound in oil prices is still not here, and new data suggests that it will take some more time before the markets start to balance out.

Global supplies are still too large to justify a significant rally in oil prices. The latest indicator that the glut of oil has yet to ease comes from the FT, which concludes that there is 100 million barrels of oil sitting in oil tankers. Oil has piled up in tankers that are floating at sea, as onshore storage space begins to dwindle.

The level of crude oil stashed at sea is nearly double what it was earlier in 2015. “Onshore storage is not quite full but it is at historically high levels globally,” David Wech of JBC Energy told the FT. “As we move closer to capacity that is creating more infrastructure hiccups and delays in the oil market, leading to more oil being backed out on to the water.”

Rising levels of crude stored at sea has more to do with shrinking capacity onshore, rather than traders stockpiling volumes in order to profit from an eventual rebound in prices. Oil tanker rates have surged this year, so it doesn’t exactly make sense to store oil at sea strictly for a trading opportunity. Daily rates for very large crude carriers (VLCCs) are around $60,000 per day, although down from a peak of $111,000 per day hit on October 8. The collapse of crude prices over the past year have contributed to a surge in tanker rates – while volatile, VLCC daily rates consistently ran as low as $20,000 over the last few years.

Related: LNG Glut Set To Worsen Considerably Over Next 3 Years

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Trans Mountain pipeline expansion ‘disastrous,’ says Mayor Gregor Robertson

Trans Mountain pipeline expansion ‘disastrous,’ says Mayor Gregor Robertson

‘My mind is clearly made up. I think this is a bad deal for Vancouver,’ he said after reading new report

Mayor Gregor Robertson says new evidence proves the expansion of Kinder Morgan’s Trans Mountain pipeline presents a grave threat to the City of Vancouver’s health, economy and environment.

The city commissioned expert reports on the potential impacts of the $5.4-billion proposal and the findings were presented to council on Wednesday.

“Today we heard overwhelming evidence that the Kinder Morgan pipeline proposal and the oil tankers associated with it are incredibly disastrous for Vancouver,” said Robertson outside council chambers after the meeting.

“My mind is clearly made up. I think this is a bad deal for Vancouver.”

The mayor entered a motion to reaffirm the city’s opposition to the project, but council agreed to defer the vote for two weeks after Coun. Elizabeth Ball requested more time to review the findings.

NEB considering proposal

The National Energy Board is considering Kinder Morgan’s plan to triple its bitumen-carrying capacity to 890,000 barrels a day by laying almost 1,000 kilometres of new pipe near an existing line between Alberta and Burnaby, B.C.

The city submitted its expert evidence to the energy board on Wednesday, including critical reports on the project’s economic viability, risk assessment and potential spill impacts.

A Metro Vancouver-commissioned report on health and air quality concluded a spill could expose up to a million people to toxic benzene fumes and kill up to 100,000 birds.

The report said benzene, a component of diluted bitumen, can cause headaches, dizziness, nausea, respiratory problems, coma and even death. People on the Stanley Park seawall next to the water could suffer irreversible health effects, it said.

 

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And The Biggest Winner From The Oil Price Plunge Is… | Zero Hedge

And The Biggest Winner From The Oil Price Plunge Is… | Zero Hedge.

“The Chinese, among others, seem to be responding to the lower oil price with additional demand,” notes one tanker executive as Bloomberg reports the number of supertankers sailing toward China’s ports matched a record on Oct. 17 and is still close to that level now. The plunge in price has enabled China to add 35 million barrels to its inventories in the past three months as the nation fills its strategic petroleum reserves, OPEC said yesterday. Furthermore, though the oil slide is hurting nations from Venezuela to Iran – that depend on energy for revenues – ship owners serving the industry’s benchmark Middle East-to-Asia trade routes are reaping the best returns from charters in years as the slump drives down the industry’s single biggest expense. As one analyst notes, “we’ve seen the Chinese buying a lot from the Middle East and that’s really let rates cook.” So it appears the Chinese, in the face of the worst growth and economy in years, arerational enough to buy more at lower prices (as opposed to the buy-more-because-stocks-are-at-all-time-highs Western investors).

A near-record 113 tankers are destined for China…

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