DP World says its ‘business as usual’ amid Iran shipping tensions
The shipping sector in Dubai and the wider UAE has not been impacted by the escalating tensions between Iran and the West, which has seen several tankers damaged and others seized by Iranian forces.
“It's business as usual in our operations,” a DP World spokesperson told Khaleej Times in a statement, but did not elaborate on the port operator’s outlook for the coming months as tensions continue to escalate.
On Saturday, Iran seized a British flagged oil tanker, while in May and June several tankers were damaged by explosions off the coast of Oman and the UAE.
Ibrahim Behairy, managing director of WIN GD, said the UAE's economy has been able to weather the situation thus far due to Dubai’s position as a global trade hub.
"The UAE is holding steady in its position as a primary hub for maritime stakeholders and key players," he said.
Referring to recent data issued by DNV GL, he said $65 billion (Dh239 billion) was invested into ports across the country during 2018.
"Taking these figures into account, WIN GD anticipates that the UAE's steady growth trajectory will continue throughout both the industry, and the nation, for the remainder of 2019 and beyond," he said.
Shipping lines and port operators across the UAE have been functioning normal, with no cancellations or major changes in schedules of cargo shipping lines due to escalating US-Iran tension in the region, according to several executives.
This is supported by a Moody's Investors Service outlook that says the global shipping sector into 2020 will remain stable as higher expected earnings are counterbalanced by US-China trade tensions and worldwide regulatory risks.
"The global shipping industry is facing a number of challenges into 2020, including the effects of the International Maritime Organisation's new regulations, which will likely lead to rising fuel costs, as well as geopolitical uncertainties, such as trade conflicts, especially the US-China trade dispute," said Maria Maslovsky, senior analyst and vice-president at Moody's Investors Service.
The primary risk to the shipping sector in the region at present are sky-rocketing insurance premiums.
Referring to the Baltic Exchange in London, the latest Bloomberg data indicates that shipments of an average of two million barrels of cargo from Saudi Arabia to China had doubled to almost $26,000 in the second half of June.
This is primarily due to a surge in insurance costs, with premiums averaging $180,000 following the attacks on tankers, compared to the going rate of $30,000 earlier this year.
Bimco, the world's largest shipping association, said war risk underwriters are charging additional premiums for calls to the Arabian Gulf and Gulf of Oman.