BP avoids sending tankers and crews into Gulf waters
British oil giant BP is avoiding sending ships to the region after it had to shelter one of its tankers in the Gulf this month in fear it could be targeted by Iranian forces.
BP is “certainly not sending British ships and crews” through the Strait of Hormuz, the only way for tankers to reach the world’s biggest oil-exporting region, CEO Robert Dudley said in an interview on Bloomberg TV.
Earlier this month, a BP tanker had to abandon a plan to load Iraqi crude and instead took shelter near Saudi Arabia because the company feared the ship could be targeted in a tit-for-tat response for British Royal Marines seizing a vessel transporting Iranian crude in the Mediterranean, a person familiar with the matter said at the time.
A British warship had to intervene to ensure the BP tanker’s safe exit of the Gulf through Hormuz and the UK navy subsequently escorted other British-flagged vessels through the chokepoint responsible for 30% of seaborne petroleum exports.
“I think that’s a good thing, having open maritime trade is really important whether it is oil or any kind of trade,” Dudley said of the escorts.
In early July, British Royal Marines stopped the Grace 1 tanker just off Gibraltar and the vessel remains in the British overseas territory’s waters now.
The Gibraltarian government said it had reason to believe the vessel was carrying Iranian oil to Syria, which it said would be a breach of sanctions.
Iran labeled the act “piracy” and, after the nation’s naval vessels approached the BP ship, another tanker, the Stena Impero, was eventually seized.
“It’s concerning but the Straits are open now and oil is moving,” Dudley said. “It’s not the first time in history we’ve had a lot of tension on the Strait of Hormuz.”
The impact on BP from rising Hormuz tensions isn’t significant, Dudley said. While insurance premiums for tankers surged in the wake of six attacks on vessels in May and June, rates to charter the ships have stayed largely flat.
That means freight - as a proportion of the overall price of oil - remains small. Crude prices also kept relatively stable as concerns about global demand offset the Middle East friction.
Chief Financial Officer Brian Gilvary also confirmed that BP hadn’t sent any of its British-flagged tankers through the Strait since the July 10 attempt by Iran’s Revolutionary Guards to seize its tanker.
BP owns 38 oil and gas carriers, none of which are in the Arabian Gulf at the time of writing, but it also hires hundreds of tankers each year, with many of them loading at ports and jetties inside the Gulf.
Dudley didn’t elaborate on what measures, if any, were being taken for those.