|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||7.48 - 7.53|
|52 Week Range||6.15 - 7.89|
|Beta (3Y Monthly)||0.25|
|PE Ratio (TTM)||25.63|
|Forward Dividend & Yield||0.36 (4.84%)|
|1y Target Est||N/A|
(Bloomberg) -- The cost of chartering a liquefied natural gas vessel on the short-term market has jumped the most since at least 2013.The day rate for a standard tanker East of the Suez Canal jumped 57% in the week to Oct. 9, as issues related to U.S. sanctions on units of China’s COSCO Shipping Corp. start to hit just as the heating season begins to boost demand. That comes on top of other factors limiting the number of ships available, including Typhoon Hagibis in Japan, the biggest buyer of the fuel, and the stockpiling of fuel on tankers.The skyrocketing rates, which have more than doubled in less than a month, show how U.S. sanctions on units of China’s largest shipper are impacting global trade flows, having already fueled steep increases in oil tanker rates. China plans to ask the U.S. to lift sanctions on the shipper at high-level trade negotiations in Washington this week.“It is a super tight market at the moment,” a spokesman at LNG tanker owner GasLog Ltd. said by phone. “We don’t know whether the COSCO sanctions will have a meaningful impact on the LNG shipping market, but it is influencing sentiment.”Benchmark LNG spot shipping rates east of the Suez Canal jumped to $130,000 a day on Oct. 9, according to Fearnleys in London. Spark Commodities Pte Ltd., a venture between commodity tracking company Kpler SAS and the European Energy Exchange, puts the rate at $133,200.China National Offshore Oil Corp. is seeking two cargoes for prompt delivery to its Dapeng terminal because of the sanctions, according to traders with knowledge of the matter. The company didn’t immediately respond to a request for comment.Woodside Petroleum Ltd.’s North West Shelf LNG venture in Australia wouldn’t load two tankers that were meant to deliver cargoes for CNOOC because the vessels are owned by a unit of COSCO, according to the traders. The Dapeng Moon, Dapeng Sun and Dapeng Star are anchored near the terminal or off the coasts of China, according to ship-tracking data compiled by Bloomberg.A Woodside spokesman declined to comment on specific loadings, and said the company is aware of the sanctions and will comply with all legal obligations. COSCO Shipping didn’t respond to an email seeking comment and didn’t answer calls from Bloomberg.The Tangguh project in Indonesia and Bintulu in Malaysia also wouldn’t load COSCO-owned vessels meant for CNOOC, according to a person with knowledge of the matter. CNOOC uses two COSCO vessels to transport gas from Tangguh -- Min Rong and Min Lu -- and one -- Shen Hai -- from Bintulu. All three are currently anchored, according to ship-tracking data.Five specialized ice-class vessels for Russia’s Yamal LNG project in the Arctic, chartered from a joint venture between COSCO unit China LNG Shipping (Holdings) Ltd. and Teekay Corp., are still on routes serving the project normally, according to ship-tracking data. Novatek PJSC, the majority shareholder of Yamal LNG, has said it has tanker capability via transshipments to fully meet its obligations should the sanctions drag on, and that it hopes the issue around sanctions will get resolved quickly.Thanks to rising shipping rates, Teekay shares have rebounded 30% after they were dragged by the sanctions to a one-month low on Oct. 2. They climbed 7.8% to $4.72 at 1 p.m. in New York on Friday.The sanctions, imposed on two COSCO shipping units last month due to alleged shipments of Iranian crude oil, came just as the stockpiling rush intensified in anticipation of higher fuel prices in the winter and price incentives to hold onto cargoes.Higher forward gas prices, known as contango, mean some LNG ships are taking long voyages and diverting to avoid quick deliveries. That absorbs vessel capacity from the spot market, which is already being affected by a surge in LNG production from the U.S.“We have been predicting for some time that the 2019-2020 winter would be a structurally short LNG shipping market. That’s driven primarily by the increasing supply coming out of the U.S. this year,” the GasLog spokesman said. “High European gas inventories are also leading to vessels either slow steaming or tankers idling around European terminals, exacerbating the tightness in the spot market.”Weather is also playing a role. Typhoons shut a receiving terminal in China and may cause delays in Japan, according to Per Christian Fett, director of the LNG unit of shipping data provider Fearnleys A/S.“When you can’t discharge because of the weather then you can’t return the vessel to load,” he said.(Updates to add Teekay shares in the 11th paragraph.)\--With assistance from Dan Murtaugh, Feifei Shen and Naureen S. Malik.To contact the reporters on this story: Anna Shiryaevskaya in London at email@example.com;Stephen Stapczynski in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Reed Landberg at email@example.com, Christine BuurmaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Iran said missiles struck one of its tankers in the Red Sea, the latest in a series of attacks on oil infrastructure in the region that have roiled energy markets.The Islamic Republic’s tanker company initially said the attacks probably came from Saudi Arabia, but later withdrew the claim. The incident, which caused a spill and a jump of as much as 2.6% in crude prices, comes weeks after a devastating attack on major Saudi oil facilities that Riyadh blamed on Tehran.Tensions have been rising steadily in the region since U.S. President Donald Trump unilaterally withdrew from an international nuclear deal with Iran and imposed harsh sanctions on the Islamic Republic. Although so far all sides have said they want to avoid war, there’s a growing risk to supplies from the world’s most important oil-producing region.“The market has been entirely too complacent given that we are one security incident away from a war,” said Helima Croft, chief commodities strategist at RBC Capital Markets.The Sabiti, a tanker capable of carrying 1 million barrels a of crude, was damaged on Friday near the Saudi port of Jeddah after being hit by suspected missiles, Iranian state media said. The explosions on the tanker occurred between 5:00 and 5:20 a.m. local time damaging two of its main oil tanks, the Islamic Republic News Agency reported.A spokesman for the National Iranian Tanker Company, initially said in a call with Iran’s Press TV that the missiles probably came from the direction of Saudi Arabia. NITC later withdrew that claim in a statement.The ship was hit twice within a 30-minute interval from the east of the Red Sea near its crossing route, Foreign Ministry spokesman Abbas Mousavi said on Telegram. The Iranian authorities presented no further evidence of the nature or origin of the attack.The Saudi Ports Authority confirmed that an incident involving a tanker had occurred near the port of Jeddah overnight, but was unable to verify if the vessel was Iranian, according to a press officer.After initially saying the spill from the tanker had been halted and the damage minimized, the Iranian oil ministry’s Shana news service said crude was again flowing into the Red Sea. No one has provided any assistance to the damaged ship, Al-Alam news channel reported, citing Nasrollah Sardashti, head of NITC.Oil AttacksThe Sabiti was fully laden with crude and heading toward the Suez Canal and the Mediterranean Sea, according to Florian Thaler, chief executive of data analytics firm OilX. On its previous voyages it has carried Iranian crude to the East Mediterranean he said.According to tanker-tracking data compiled by Bloomberg, the vessel was under way using its engine and heading south at a speed of 9.6 knots as of 8:45 a.m. London time. Its destination was listed as Larak, an Iranian island in the Strait of Hormuz.Oil prices jumped above $60 a barrel in London after the attack. Despite the growing risk to Middle Eastern supplies, crude prices have been depressed by fears of an economic slowdown due to the U.S.-China trade dispute. Brent is still lower than it was before the Sept. 14 drone and missile strikes on Saudi Arabia’s Abqaiq and Khurais oil facilities last month that briefly cut global supplies by 5%, the worst sudden disruption in history.In an interview with CBS’s “60 Minutes” last month, Saudi Crown Prince Mohammed Bin Salman warned that conflict between his country and Iran would lead to a “total collapse of the global economy” and should be avoided. The Foreign Ministry of China, which gets a significant proportion of its oil imports from the Persian Gulf, urged restraint on Friday in order to safeguard peace and stability in the area.The attack on the Sabiti came a day before Pakistani Prime Minister Imran Khan is scheduled to visit Tehran for talks on how to reduce tensions with Saudi Arabia, Iranian lawmaker and member of the parliamentary commission for national security, Heshmattolah Falahatpisheh, said in an interview with the semi-official Iranian Labour News Agency. Khan was one of several leaders who unsuccessfully tried to broker dialogue between Trump and Iranian President Hassan Rouhani at the United Nations General Assembly last month.The Pentagon said on Friday that it’s sending more U.S. forces to the Middle East to “assure and enhance the defense of Saudi Arabia” against Iran. Overall about 3,000 personnel are being deployed or having their missions extended in the region, including a previously promised delivery of additional Patriot and Thaad missile defense systems.(A previous version of this story corrected the job title and company name of Florian Thaler.)\--With assistance from Dan Murtaugh, Dandan Li, Golnar Motevalli, Verity Ratcliffe, Dana Khraiche, Julian Lee, Chloe Whiteaker and Adrian Leung.To contact the reporters on this story: Golnar Motevalli in Tehran at firstname.lastname@example.org;Arsalan Shahla in Dubai at email@example.com;Yasna Haghdoost in Beirut at firstname.lastname@example.orgTo contact the editors responsible for this story: Ramsey Al-Rikabi at email@example.com, James Herron, Christopher SellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Melting ice is opening access to new energy resources faster than predicted, prompting a nascent great power struggle in the Arctic as the political and economic map of the world is transformed.That, at least, is one picture that's being sharply drawn at this weekend’s Arctic Circle Assembly in Iceland, a kind of Davos for the far north. The seven-year-old event is the largest annual forum for politicians, scientists, environmentalists and others to talk about the Arctic, including climate change, security and the exploitation of new oil and gas discoveries.U.S. Energy Secretary Rick Perry called for “free nations” to resist attempts from those “that seek to dominate the Arctic from the outside,” an apparent reference to China, which calls itself a “near Arctic” power. Speaking at Thursday’s opening session, he also warned against countries trying to do the same through energy sales, an oblique dig at Russia.Yet the attempt to rally U.S. allies faces an uphill battle as the Arctic emerges as a potential 21st century geopolitical flashpoint in the way transportation routes like the Suez Canal were in the 20th.Perry was followed on stage by Dmitry Artyukhov, the governor of the Yamal-Nenets region in Russia. He spelled out the growing international involvement in his region’s new and planned liquefied natural gas fields.In the three years from 2016 to 2018, these have quadrupled Russia’s share of the global LNG market to 8%, from 2%, with much more growth to come. Investors so far include Total SA of France, CNOOC Ltd. and China National Petroleum Corp. of China, and Mitsui & Co. and Japan Oil, Gas and Metals National Corporation, of Japan. Further projects are already approved.South Korea, meanwhile, is building ice-hardened LNG supertankers to ship the gas, at more than $300 million apiece. They can only deliver to Asia when Russia’s Northern Sea Route is relatively ice free. Still, this year it became navigable in August and traffic is still passing in October. The time-frame for when the passage will be consistently ice free is shrinking all the time.Artyukhov was followed by a double act of diplomats from China and U.S. treaty ally South Korea, who talked about their tight trilateral cooperation on Arctic affairs with another U.S. treaty ally, Japan.Asked if China might stop calling itself a near Arctic state in the light of U.S. opposition, Gao Feng, special representative for Arctic affairs in China’s foreign ministry, said simply: “No.”“We see the emergence in front of our eyes of a new economic, business and political map,” said former Iceland President Olafur Ragnar Grimsson, who founded and chairs the Arctic Circle Assembly.“What is happening now is first, the emergence of Asia as the leading source of economic growth in the 21st century, and second, the opening up of the Arctic which, combined with new technologies, is creating access to the oil and gas to supply that growth,” he said in an interview just ahead of the conference in the Icelandic capital Reykjavik.That emerging new world order was mapped out in a slide show on Friday morning by Henry Tillman, who runs Grisons Peak LLP, a London-based investment bank, and its research arm, China Investment Research. Projected onto the conference hall’s giant screen, he called it “Paving the Polar Silk Road.”The Polar Silk Road is part of China’s Belt and Road Initiative and aims to reduce its trade logistics costs. Not only is the Northern Sea Route much shorter than current energy shipping lanes to Asia via the Indian Ocean and Suez Canal, there’s also less political risk, Tillman said. There’s nothing like the Strait of Hormuz in the Gulf, for example, where tension with Iran has escalated.The U.S. has ambitions of its own to become one of the world’s leading LNG exporters. It’s projected to be producing 100 million tons of LNG by 2024, to Russia’s 63 million tons, but could face higher extraction and transport costs to get to export markets in Asia and Europe, according to Tillman.That explains the aggressive stance the U.S. has taken against a planned natural gas pipeline from Russia to Europe and toward Russia and China’s activities in the Arctic, said Grimsson, Iceland’s president from 1996 to 2016.Shawn Bennett, deputy assistant secretary for oil and natural gas at the Department of Energy, said the U.S. was not concerned about competition. Growth projections for natural gas demand in India and other Asian countries are so high, and the need for supply diversification in Europe so acute that there’s little risk of a glut, he told Bloomberg. “Global demand for LNG is just going to grow,” he said.The U.S. may be pushing back in more concrete ways. On September 30, the Department of the Treasury imposed sanctions on units of China’s Cosco Shipping Corp., over alleged breaches of U.S. sanctions against Iran. The move immediately hit the Yamal project’s LNG tanker routes because of Cosco’s share in one of the main shipping companies involved.Still, for those who have been working in the Arctic for a long time, much of the geopolitical discussion sounds a little breathless. Last year, Russia’s Northern Sea Route carried 29 million tons of cargo, with projections rising to 90 million. The Suez Canal carries about 1 billion tons.Ice floes are unpredictable even when retreating, and insurable risks for shipping through the polar ice can be significantly higher than in warmer seas, according to Janne Valkonen, who specializes in engineering ships and oil rigs for cold weather at DNV GL Group, a provider of maritime risk services.“Disputes, race, scramble – stop using these terms,” said Liv Monica Stubholt, a Norwegian lawyer with the firm Selmer AS, who advises companies on Arctic issues “There is no scramble for the Arctic. The biggest problem my clients have is attracting investment.”To contact the author of this story: Marc Champion in London at firstname.lastname@example.orgTo contact the editor responsible for this story: Rosalind Mathieson at email@example.com, Rodney JeffersonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- President Donald Trump’s decision to move American troops out of Syria to make way for a Turkish attack on pro-U.S. Kurdish forces cements America’s growing reputation in the Middle East for being unreliable, unpredictable and, increasingly, even weak.Unreliability was the first thing noticed — by America’s biggest critics, such as Iran; its main competitors, including Russia; and even its allies, including Israel and Saudi Arabia. The impression began to form during President Barack Obama’s first term, when Washington, after a period of dithering, abandoned Egypt’s President Hosni Mubarak, allowing his ouster after huge street protests. Was this America’s way of showing solidarity with friends?Such questions grew into serious doubts when Obama, with five other international powers, signed a nuclear agreement with Iran. Israel expressed alarm, and more quietly so did Gulf Arab countries. All feared it might even be the start of a broader U.S.-Iranian rapprochement that would replace their longstanding U.S. partnerships.It didn’t help when Obama called Gulf Arab countries “free riders,” and suggested they “share” the Middle East with Iran. To Saudis, especially, who had sided with the U.S. for decades, that felt like a betrayal.After the 2016 U.S. election, America’s Middle Eastern partners hoped President Donald Trump would improve matters. Instead, he kept up the unreliability, and added a heavy measure of unpredictability.Trump famously finds it advantageous to keep friends and foes alike off balance. Such unpredictability may be useful in the real estate business. It may also work in international relations for small, disruptive states like Iran and North Korea that rely on chaos and destabilization to further their agendas. But for a global power looking to preserve stability in a volatile region like the Persian Gulf, unpredictability is self-defeating.Even the Israelis, who benefited from Trump’s unpredictability when he recognized their annexations of Jerusalem and the Golan Heights, have been unnerved by his sudden reversals on North Korea and other global challenges. As they watch him abandon the Syrian Kurds to Turkey, some are wondering if they might be next.Saudi Arabia and other Gulf Arab countries have concluded that Trump sees them mainly as arms purchasers. So they have little difficulty imagining him making friends with Iranian leaders, and reaching for photo-ops and small diplomatic victories largely at their expense.Added to all this is the growing perception in the Middle East that the U.S. is losing, or has lost, the will to fight. While no one doubts America’s military and economic power, it has also, in the aftermath of disastrous campaigns in Iraq and Afghanistan, demonstrated serious conflict fatigue. That became evident when President Obama declined to enforce his own “red line” against the use of chemical weapons in Syria. And it appeared twice more recently when Trump essentially ignored Iran’s downing of an American drone and audacious attacks on Saudi oil facilities.But no action, or non-action, has been as stark as this week’s abandonment of the Kurds, who have been the key allies in the American battle against Islamic State terrorists. Now it appears to friend and foe alike that the U.S. has fundamentally lost its nerve in the Middle East. It will fight only in self-defense, and only as a last resort.All this calls to mind the 1956 Suez fiasco, which resulted in a collapse of British and French authority in the Middle East that presaged a broader loss of global clout for those declining European powers. At the time, they were being superseded by the rise of American and Soviet dominance.The U.S., in contrast, has undermined its own authority with no help from any other country or competitor. This only reinforces its image as a global power that, especially in the Middle East, is growing ever more unreliable, unpredictable and weak.To contact the author of this story: Hussein Ibish at firstname.lastname@example.orgTo contact the editor responsible for this story: Mary Duenwald at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Hussein Ibish is a senior resident scholar at the Arab Gulf States Institute in Washington. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
When Suez SA (ENXTPA:SEV) released its most recent earnings update (30 June 2019), I compared it against two factor...
Shares in French waste and water group Suez dropped more than 6% on Wednesday after its new chief executive unveiled a four-year plan to boost earnings but lacked clarity on dividends and planned asset sales. The plan unveiled on Wednesday by Bertrand Camus, who was appointed in May, follows an appeal in July by activist investor Amber Capital for a review of the utility's strategy to create more value for its shareholders. Camus' 2020-2023 strategy focused on boosting earnings per share, cutting costs and selling assets, but he declined to say which assets the firm may sell and gave no date for a long-awaited dividend increase.
In December 2018, Suez SA (EPA:SEV) released its earnings update. Generally, analysts seem fairly confident, with...
(Bloomberg Opinion) -- So much for Britannia ruling the waves.U.K. Prime Minister Theresa May will spend her last days in office working out how to secure the release of the Stena Impero, a British-flagged oil-products tanker seized by Iran in the Strait of Hormuz last week.Amid the likely handover of power to former Foreign Secretary Boris Johnson, and just over three months before the U.K. is due to exit the European Union, the incident looks like a disastrous miscalculation by a political class that’s had its share of poor decision-making.Indeed, an ill-planned military operation in a vital global shipping lane and a mistaken gamble on Washington’s response looks oddly reminiscent of the Suez crisis – the disastrous 1956 episode that marked the end of Britain’s ambitions as a global power.The most baffling thing about this incident is how entirely predictable it’s been.Tehran has been operating a calibrated tit-for-tat strategy in the Persian Gulf ever since the situation in the Strait of Hormuz started to deteriorate this summer. Within hours of the U.K. seizing a tanker carrying Iranian oil near Gibraltar earlier this month, a senior official in Tehran was calling for retaliation. Given the relative ease with which Iran can control shipping through the Strait (a fact the country’s foreign minister Mohammad Javad Zarif highlighted in an interview last week with Bloomberg Television), the current situation was all but inevitable, as my colleague Julian Lee has written.What happens if Tehran decides that honor isn’t yet satisfied? May’s government lacks the firepower to prevent further attacks: There’s just a single frigate, the HMS Montrose, currently in the region. Two more ships, HMS Duncan and HMS Kent, are to be rotated through the Gulf over the course of this year. But at best two boats will be available to escort marine traffic – or one when Montrose is docked.That’s plainly inadequate to protect a merchant fleet that numbers close to 1,000 trading vessels, once you throw in U.K.-owned ships sailing under the flags of other countries. Tankers likely to transit Hormuz comprise about a third of that total.(1)It defies logic that the U.K. got into this mess without being aware of how events would play out – but much about the U.K. these days defies logic.The country’s civil service surely would have warned the Cabinet that the Gibraltar operation, however legitimate, would risk a blowback Westminster couldn’t contain. Looking the other way to avert an international incident is a time-honored practice of governments adjacent to global shipping lanes, one that Spain appears to have employed in this situation.Whether Westminster decided to intervene out of an abundance of duty or the expectation Washington would offer its far larger Persian Gulf force for protection as repayment, the government clearly acted without a secure back-up plan. The fact that the crisis has played against the backdrop of the messy resignation of Westminster’s ambassador to Washington, Kim Darroch, couldn’t have helped matters, either.To be sure, the existence of diplomatic ties between Iran and the U.K. should, in theory, make resolving this incident a little easier than a comparable blow-up with the U.S. Even there, though, it’s not clear that London has much leverage these days. Relations now are almost certainly worse than they were in 2007, when it took nearly two weeks to secure the release of 15 Royal Navy personnel captured in an area disputed between Iran and Iraq. British-Iranian woman Nazanin Zaghari-Ratcliffe has been imprisoned in the country for more than three years, in a lingering dispute where the intervention of Britain’s likely future prime minister has been less than helpful.As with Suez, which gave cover for the Soviet Union to send tanks to crush Hungary’s 1956 revolution, the bigger risk isn’t so much the blow to Britain’s standing in the world, as international relations more broadly.With Iranian oil exports bumping along around their lowest levels since the 1980s, Tehran’s desire to stay on good terms with the remaining parties to the Joint Comprehensive Plan of Action on its nuclear program is one of the main factors preventing the situation in Hormuz deteriorating further. That’s markedly weakened now that the Stena Impero situation has put it on a collision course with a second member, after the U.S., of the six-nation group.As we’ve argued before, the situation in Hormuz is a good deal more fragile than you’d think just from looking at somnolent crude prices. A crucial passage for the world’s oil flows has been a tinderbox for months. It’s no place for Britain, in its current weakened state, to be caught playing with matches.(1) Maritime lawyers might quibble that Iran should only have a problem with boats sailing under the British flag, but the fact that it also stopped the British-operated, Liberian-registered Mesdar last week suggests Tehran is acting as if all is fair in love and war.To contact the author of this story: David Fickling at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The noose strangling the flow of oil to Syria tightened a notch last week, when British Royal Marines boarded a tanker carrying Iranian crude into the Mediterranean Sea through the Strait of Gibraltar. With Syria’s Iranian supplies halted, the flow will have to come from somewhere else, and the alternative is troubling.The Very Large Crude Carrier Grace 1 loaded a cargo of Iranian oil from the Kharg Island terminal in mid-April and set off on a long voyage around the southern tip of Africa to the eastern Mediterranean. The ship was apprehended because it was believed to be heading to a refinery that is ultimately owned by Syria’s ministry of petroleum, an entity subject to European Union sanctions. The journey from Iran to Syria around Africa is about 14,500 miles (23,300 kilometers), compared with about 4,100 miles via the Red Sea and Suez Canal. Why take such a circuitous route? Because Iranian crude is not accepted by the owners of the Sumed pipeline, which crosses Egypt to link the Red Sea to the Mediterranean. It is also banned from the Eilat-Ashkelon pipeline across Israel, originally built with the express purpose of carrying the Persian Gulf nation’s output to the Mediterranean. More recently, ships carrying Iran’s crude to Syria also seem to be prevented from using the Suez Canal. That looks to be a new development, since the oil trade between the two countries between 2016 and 2018 via the waterway averaged 50,000 barrels a day. All of those ships involved in that transport that have not been scrapped or sold appear on a list of vessels undertaking sanctionable activity published in March by the U.S. Department of the Treasury’s Office of Foreign Assets Control.The fate of one of those ships, the Suezmax tanker Sea Shark, is instructive. It was hauling a cargo of around 1 million barrels of Iranian crude when it arrived at the southern approach to the Suez Canal at the end of November, but turned back a day later, according to tanker tracking data compiled by Bloomberg. It then spent nearly five months anchored off the Egyptian coast before returning to Suez in late April. It is a still there and it is still full of oil. Prior to its interrupted voyage, the ship had made at least 11 journeys in 2017 and 2018 carrying oil from Iran to Syria. This doesn’t mean Iran’s crude is completely forbidden in the waterway, since ships heading to Turkey are still able to pass. But it does mean that Syrian-bound ships carrying its cargoes have to rely on the much longer route around Africa and that a larger ship would make the journey more economic – the Grace 1 can carry twice as much oil as the Sea Shark. But that route passes through European Union waters as ships enter the Mediterranean and it was here that the Grace 1 was impounded. The government of Gibraltar has denied the claim by the Spanish Foreign Affairs Ministry that the action was carried out at the request of the U.S.If Syria can’t get Iranian crude via the sea, what about by land? That will be difficult. U.S. allies control most of the oil-producing territory in Syria itself, while American forces straddle most of the crossings from Iraq into Syria, which might have been used to create an overland route for Iranian output.Syria clearly needs to import oil. Aside from all the normal reasons, President Bashar Al-Assad has a war to fight. Since sanctions have severely constrained his universe of potential suppliers, he has little recourse but to look to his supporters.If the smuggling routes set up by ISIS during its now-defunct caliphate to export oil from Syria are not now operating in reverse, perhaps they soon will be. Or, perhaps some of the fuel delivered to keep Russian military aircraft and vehicles operating in Syria could find its way to the Syrian state.The Syrian government has two big oil-producing friends, Iran and Russia. With the routes from the first apparently closed, it may have to turn to the second. This presents a new host of potential risks. Impounding an Iranian ship in the Strait of Gibraltar is one thing. Stopping a Russian ship in the Aegean Sea is quite another. \--With assistance from Elaine He.To contact the author of this story: Julian Lee at firstname.lastname@example.orgTo contact the editor responsible for this story: Jennifer Ryan at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking...