Traders concerned over threat but assured by higher security * Alternate routes bump up costs, will be passed to consumers , Oil on floating storages can also be at risk. Oil traders are concerned about supply disruptions via the Malacca Strait after the Singapore Navy warned of possible attacks on tankers, but said alternate routes could be used that add slightly to costs while stocks on landed and floating storages offer ample buffer.
However, they cautioned that the more than 30 tankers crowding the waters off Singapore, Malaysia and Indonesia used as storage tanks for distillates, fuel oil and crude could also be targets. [O/DISTARB] [O/FUELARB] [O/CRUDEARB]
Malaysia and Indonesia are bolstering security in the Strait of Malacca, through which flows at least 15 million barrels of oil each day, while Singapore also raised alert levels and beefed up security at its airport and new casino resorts after the navy's warning. [ID:nSGE62408X] [ID:nSGE6230CO]
"Of course, we are concerned. But there's nothing more that we can do on our part as the cargo owners to prevent this from happening," a senior Singapore-based Asian trader said on Friday.
"The alternatives are easy enough. The diversion around Indonesia adds two to three days to sailing time and costs a little bit more, but that's OK."
The trader said in the event of an attack on a tanker, the loss of a single cargo might be a problem for the owner, "but it's an opportunity for everyone else to sell at higher prices".
If the strait was blocked after an attack, tankers could sail further south along the western coast of Indonesia's Sumatra via the Sunda Strait and head north to Singapore, adding two to three days of sailing time. Ships moving to North Asia could sail towards East Java via the Lombok Strait or Banda Strait.
However, they cautioned that the more than 30 tankers crowding the waters off Singapore, Malaysia and Indonesia used as storage tanks for distillates, fuel oil and crude could also be targets. [O/DISTARB] [O/FUELARB] [O/CRUDEARB]
Malaysia and Indonesia are bolstering security in the Strait of Malacca, through which flows at least 15 million barrels of oil each day, while Singapore also raised alert levels and beefed up security at its airport and new casino resorts after the navy's warning. [ID:nSGE62408X] [ID:nSGE6230CO]
"Of course, we are concerned. But there's nothing more that we can do on our part as the cargo owners to prevent this from happening," a senior Singapore-based Asian trader said on Friday.
"The alternatives are easy enough. The diversion around Indonesia adds two to three days to sailing time and costs a little bit more, but that's OK."
The trader said in the event of an attack on a tanker, the loss of a single cargo might be a problem for the owner, "but it's an opportunity for everyone else to sell at higher prices".
If the strait was blocked after an attack, tankers could sail further south along the western coast of Indonesia's Sumatra via the Sunda Strait and head north to Singapore, adding two to three days of sailing time. Ships moving to North Asia could sail towards East Java via the Lombok Strait or Banda Strait.
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