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VLCC rates keep most tankers transiting Hormuz

Both Saudi tanker giant Bahri and Brazil’s Petróleo Brasileiro — as well as one other unnamed company — have suspended tanker transits through the Strait of Hormuz, but most operators seem ready to take the risk

‘There have been no attacks on tankers, or any specific threats to shipping at this stage. I don’t think anybody is massively concerned at the moment, although obviously everybody is a little bit more alert’ — EA Gibson head of research

AT LEAST two companies have suspended tanker transits through the Strait of Hormuz in the light of growing tensions in the Middle East.

But so far, the decision of Saudi tanker giant Bahri and Brazil’s Petróleo Brasileiro, is the exception, as a spike in tanker rates continues to offer enough incentive to keep others sailing, according to market sources.

At this early stage, the impact on either crude shipments from the region and on rates for operators willing to make the trip remains unclear.

But informed opinion among brokers is that, if anything, the withdrawals will tend to push rates higher still.

Asked if he was aware of anyone likely to follow the lead provided by Bahri and Petrobras, one London-based hands-on tanker broker commented: “No is the short answer. It’s one of those things that, if it were going to happen, would have happened already.”

A senior figure at a major broking house told Lloyd’s List: “There were rumours circulating about a very small number of owners, none of which has been substantiated. The rumours were early yesterday [Wednesday] and the situation is calmer today, so at time of this message, it is a nothing story, in all honesty.”

A source at a rival shop said that he was aware of potentially one other owner in addition to Bahri and Petrobras that had said in its own words that it would “rather not” accept a stem in the Gulf, but declined to name it on grounds of client confidentiality.

State-owned Bahri has decided to stop Hormuz transits following Iranian missile strikes on US military bases in Iraq in recent days, according to a report in the Wall Street Journal.

The development may constrain lifting from what remains the world’s largest oil exporter, which last saw its output cut following drone strikes on production facilities last September.

The company has been contacted with a request for comment.

Meanwhile, Petrobras’ decision has been taken “to avoid sections that pose a risk to the safety of its operations”, it said in statement on its website, presumably mindful of the escalation of tensions in the region since the US killing of Iranian general Qasem Soleimani last week.

“Such a change will not have any impact on fuel supply in Brazil. Local developments continue to be monitored and evaluated,” it said in a statement in Portuguese on its website.

Richard Matthews, head of research at broker EA Gibson, said that the markets remained calm, as there are no signs of heightened threats against tankers.

“There’s been no real change between today and yesterday, and I haven’t heard of any other companies not transiting,'' he said. “There have been no attacks on tankers, or any specific threats to shipping at this stage. I don’t think anybody is massively concerned at the moment, although obviously everybody is a little bit more alert.”

Andrew Wilson, his opposite number at Barry Rogliano Salles in Paris, said: “The way I see it, when [very large crude carrier] rates are $100,000 per day, owners are willing to take some risks.

“If you have Bahri and Petrobras pulling out — and Bahri is a big one — then the rate is going to go up and owners are going to be willing to take it. That’s the way the market is. There’s enough storage in the Gulf, so that’s not going to be an issue.”

The only circumstances in which Mr Wilson can foresee a widespread boycott of the Strait is if a specific threat to shipping is identified.

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