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Gulf Conflict Shakes Oil Trade: Fujairah Port Avoided
11 Mar
Summary
- Shipping companies avoid Fujairah due to strike fears and insurance worries.
- Canceled oil cargoes are resold at higher spot market prices.
- Missile threats have disrupted energy trade and traffic through Hormuz.
The widening conflict in the Persian Gulf has severely disrupted the regional energy trade, with shipping companies now wary of calling at Fujairah, a key oil port. Concerns over potential drone and missile strikes, alongside hesitant insurers, have prompted several major shippers, including Nippon Yusen KK, to avoid the United Arab Emirates port. This avoidance has led to the cancellation of oil cargoes.
These canceled cargoes, originally destined for buyers at official prices, are being resold on the spot market at substantially higher prices, creating lucrative opportunities for producers. Local authorities recently contained a fire at the Fujairah Oil Industry Zone caused by falling shrapnel, underscoring the security risks. The situation has all but cut off traffic through the Strait of Hormuz, impacting global energy supplies.
