Piracy driving up shipping costs
Piracy in the Gulf of Aden and off the Somali coast could significantly increase insurance costs for shipping operators.
According to IHS Global Insight Inc., ''shipping costs will rise significantly as insurance premiums increase substantially''.
Ship insurers are said to be advising ship owners to avoid the waters off Somalia.
Saturday's hijacking of a Saudi VLCC 450 miles off the Somali coast has reportedly made Frontline Ltd, the world's largest supertanker specialist, consider diverting its vessels away from waters near Somalia.
''When it comes to the safety of our crew, we don't take any chances,'' said a Frontline spokesman to Bloomberg on Tuesday.
According to Bloomberg, an attempted hijacking of Frontline's Front Voyager in the same area was thwarted in September.
Meanwhile, chemical tanker giant Odfjell has already decided to divert its vessels away from the Gulf of Aden, and have them circle the African continent via the Cape of Good Hope instead of going through the Suez Canal.
Industry players have pointed out that such strategies would ''risk damaging the business of the Suez Canal'' and calls have been made to the Egyptian government to take decisive measures.
Close to 12% of global tanker voyages moving crude oil and petroleum products traverse the Gulf of Aden to and from the Suez Canal.
Latest reports on Tuesday indicate that at least three more ships have been hijacked off the Somali coast.
According to one International Maritime Bureau (IMB) official, Somali pirates currently hold 17 vessels and 339 crew members hostage, CNN reported Wednesday.
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| Frontline tankers may start taking longer route |
Ship insurers are said to be advising ship owners to avoid the waters off Somalia.
Saturday's hijacking of a Saudi VLCC 450 miles off the Somali coast has reportedly made Frontline Ltd, the world's largest supertanker specialist, consider diverting its vessels away from waters near Somalia.
''When it comes to the safety of our crew, we don't take any chances,'' said a Frontline spokesman to Bloomberg on Tuesday.
According to Bloomberg, an attempted hijacking of Frontline's Front Voyager in the same area was thwarted in September.
Meanwhile, chemical tanker giant Odfjell has already decided to divert its vessels away from the Gulf of Aden, and have them circle the African continent via the Cape of Good Hope instead of going through the Suez Canal.
Industry players have pointed out that such strategies would ''risk damaging the business of the Suez Canal'' and calls have been made to the Egyptian government to take decisive measures.
Close to 12% of global tanker voyages moving crude oil and petroleum products traverse the Gulf of Aden to and from the Suez Canal.
Latest reports on Tuesday indicate that at least three more ships have been hijacked off the Somali coast.
According to one International Maritime Bureau (IMB) official, Somali pirates currently hold 17 vessels and 339 crew members hostage, CNN reported Wednesday.
Cowan Thant Zin | Wed Nov 19 04:24 GMT 2008