RAYADH: A Saudi Arabia-backed blockade of ports in Yemen is starting to affect shipping activity including the delivery and loading of oil and gas shipments, shipbrokers and traders in Singapore said.
The Grace Acacia, a Bahamas-flagged liquefied natural gas tanker, was scheduled to load cargo at the Balhaf LNG terminal, but the loading has been delayed and the tanker is currently anchored at the Fujairah port in the United Arab Emirates, a trader said.
The Yemen LNG plant has a capacity of 6.7 million tons a year and supplies a large portion its output to Asian markets. However, the impact on LNG prices could be limited due to existing excess supply in Asia, traders said.
Chinese oil traders have, meanwhile, been making enquiries in the Singapore spot market for alternative oil supplies, according to Singapore-based traders. Yemen’s oil exports are relatively small with China importing around 50,000 barrels a day in 2014, less than 1% of its total oil imports, while India imports only a handful of cargos.
Marine insurer Skuld P&I said in a weekend advisory note that it has received reports of an increasingly tight blockade at Yemeni ports. “Members [of the insurer] with vessels at Yemen, or proceeding to Yemen need to urgently review the situation in the light of this development,” it said.
It said reports indicate that Saudi Arabia-led naval forces have started to enforce a blockade on Yemeni ports, particularly targeting those which may be under the control of the Houthi-led rebels fighting government forces across Yemen.
Yemen regularly imports petroleum products like diesel or gasoil, and these shipments may be affected, traders said.
Bimco, a shipping trade group, said Monday that “navigation in Yemen’s territorial waters has been banned and ships are not allowed into Yemen unless inspected and approval by the Saudi-led coalition forces.”
“Yemen has banned entry into the territorial waters and has authorized coalition countries to implement the decision, adding that the ban has been imposed on the country’s maritime zones,” it said, citing a statement from Yemen’s Ministry of Foreign Affairs.
Bimco said only emergency food and medical aid vessels will be allowed entry after being searched and has advised its members to transit the Gulf of Aden and Red Sea outside Yemeni territorial waters where possible.
“Of course, the big concern for everyone is the risk that the Yemeni conflict will get out of hand and rebels would try to sabotage Saudi oil trade by, say, targeting with rockets ships traversing the Bab Al-Mandeb strait,” Ralph Leszczynski, research director at shipbroking firm Banchero Costa, said.
However, no attacks have happened so far and there’s no significant impact on shipping up to this moment with most shippers taking precautionary measures, he added.
