Reinsurance News

Salvage underway after Gulf of Oman attacks, but situation still worrisome

17th June 2019 - Author: Luke Gallin

Taiwan’s state-owned oil supplier, CPC Corp. has said that it expects last week’s attack on oil tanker Front Altair in the Gulf of Oman to drive losses of just NT$ 8 million (USD 253, 968).

Gulf of Oman oil tanker explosion

Unverified image of what Iran’s IRIB news agency said was the burning Front Altair

Chiu Chia-shou, Vice President of CPC Corp., which chartered the Front Altair to deliver naphtha, said that the attack would not have a significant impact on its operations.

According to Chia-shou, the firm had spent NT$ 1.07 billion (USD 34 million) on the naphtha cargo, but the fact that the whole of the cargo was insured means that the preliminary loss estimate for the firm is just NT$ 8 million and, comes after taking into account insurance payments.

The Front Altair, along with the Kokuka Courageous was hit by explosions like last week in the Gulf of Oman. The latest attacks have intensified political instability and uncertainty in the Gulf region, and is also expected to result in higher insurance premiums as carriers look to navigate a delicate situation.

Last week, analysis revealed that cargo insurers can expect to face an exposure value of $40 million for goods on the Kokuka Courageous, and $25 million for the Front Altair tanker.

However, reports suggest that the exposure value on the Front Altair is considerably higher than what had been reported.

It’s been confirmed that the fire on the Front Altair has since been put out, and the vessel remains adrift. The CPC Vice President explained that the 75,000 tonnes of naphtha represented just two days inventory for the oil supplier. Currently, CPC has 75 days of inventory and as such has said that the attack will not impact supply to the local marketplace.

The Kokuka Courageous has reportedly now arrived safely at anchorage in the United Arab Emirates, and it’s been noted that the ship-to-ship transfer of its cargo of methanol is yet to be scheduled. An announcement from the firm appointed to salvage both tankers claims that the situation of the Front Altair is still worrisome.

Insurance rates for ships sailing through the straits of Hormuz have risen. Splash 247 reports that large crude carrier owners are being asked to pay $200,000 more for a single seven-day voyage.

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