An increasing number of Very Large Crude Carriers (VLCCs) have changed course from the Persian Gulf to other routes due to rising Iranian attacks. This situation poses a serious threat to the shipment of oil cargoes under wartime conditions.
Stopping or Changing Course of Tankers
According to tanker tracking data, at least 10 Very Large Crude Carriers and several Suezmax ships have recently avoided approaching the port of Fujairah in the United Arab Emirates or have changed their routes. These changes occur while other tankers continue their journeys, but the retreat of these tankers amid almost daily attacks around the Strait of Hormuz and near the port of Fujairah has raised new concerns about the sustainability of oil flow from this waterway.
Read more: U.S. Strategic Oil Reserves Under Pressure from Persian Gulf Crisis
Economic Consequences
The port of Fujairah is recognized as a temporary destination for tankers that ultimately head towards the Gulf of Oman, where they can collect cargoes through ship-to-ship transfers. Therefore, the number of vessels heading towards this port indicates the willingness of tanker operators to approach this waterway. This change in course could threaten the method that has helped export oil from the Persian Gulf and bring it close to pre-war levels.
Large tankers can wait near Fujairah and in Omani waters, while shuttle tankers take the more dangerous route through the strait. This system relies on a continuous supply of receiving tankers, so a significant retreat of empty tankers could slow the oil flow and cause shuttle tankers to wait longer.
Moreover, the retreat of tankers occurs at a time when significant financial rewards await them. The global tanker shortage has driven transportation costs to extraordinary levels. For example, renting a ship to transport oil from the United States to China now costs more than launching a rocket into space.
Read more: Surge in Transportation Costs Disrupted U.S. Oil Exports · Oil Cargo on New Route to Russia After Recent Sanctions
