Chevron CEO: Multiple Ships Attacked In Strait of Hormuz
Multiple vessels transiting the Strait of Hormuz have suffered attacks this week, Chevron Corp. (NYSE:CVX) Chief Executive Officer Mike Wirth revealed in an interview on Bloomberg TV on Friday. According to Wirth, these previously unreported incidents highlight ongoing risks for ships plying the channel despite any ongoing diplomatic efforts. Commercial shipping traffic through the key chokepoint--which normally carries 20% of the world’s petroleum--remains paralyzed with traffic at roughly 10% of its pre-war levels.
Wirth says Chevron currently has six vessels under charter operating within the Persian Gulf. However, the CEO is adamant that his company will not consider paying any form of toll or fee to secure passage for its cargo through the Strait of Hormuz. In any case, these ships belong to third parties, implying that the burden of paying Iran’s levies falls on them. Iran began demanding upfront cash payments of up to $2 million per tanker from select operators in March in exchange for guaranteed safe passage. However, the United States has strictly warned shipping companies that paying these illegal tolls risks violating Western sanctions.
Wirth has warned that global trade is unlikely to return to normal quickly, even if a peace agreement between the U.S. and Iran is soon reached, saying that shipowners and insurers must first rebuild confidence after months of seeing crews and ships trapped in the region. The United States and Iran are discussing a memorandum of understanding that would extend the current ceasefire and begin negotiations on a permanent settlement. The proposal includes a 60-day extension of the ceasefire, the reopening of the Strait of Hormuz, and further talks over Iran’s nuclear program.
While U.S. officials remain upbeat and have reported that Iran is negotiating in good faith, Iranian state media and officials have maintained caution, stating that no final agreement has been completely finalized nor confirmed yet.
By Alex Kimani for Oilprice.com
Philippines Receives First Iranian Crude Cargo Since Hormuz Blockade
The Philippines has received its first cargo of Iranian crude, Reuters reported on Friday, citing tanker-tracking data from Kpler and Vortexa.
A Suezmax vessel capable of carrying up to 1 million barrels of crude that departed from Iran's Kharg Island in late March made a ship-to-ship transfer offshore Singapore onto another tanker, which delivered the oil to the Bataan refinery in the Philippines in the middle of May, according to the data.
The delivery was the first Iranian cargo to the Philippines, which is one of the Asian countries worst hit by the world's biggest oil supply disruption.
The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) in mid-March issued a general license, which basically authorized until April 19 imports of Iranian crude loaded on vessels as of March 20.
Southeast Asian economies such as the Philippines, Indonesia, Malaysia, and Vietnam were the first to feel fuel shortages after the blocked Strait of Hormuz cut off most of their regular crude and fuel supply from the Middle East.
The Philippines, which sourced 98% of all its oil from the Middle East before the war, declared a national energy emergency as early as in the middle of March.
Many of the Southeast Asian countries have turned to alternative suppliers, including Russian oil, which is now allowed for unsanctioned sale by the U.S. Treasury until the middle of June, following several one-month renewals of waivers for Russian oil already loaded on tankers.
In addition, the Association of Southeast Asian Nations (ASEAN) looks to ratify a petroleum security agreement, Philippine Trade Secretary Cristina Roque said last month, as Asian nations are reeling from the shock oil supply crisis amid the Middle East war.
Amid the fuel crisis and shortages, spiking prices, and accelerating inflation, ASEAN would look to ratify the pact for oil sharing, which is aimed at strengthening energy security and resilience to shocks in the region, the Philippine official said.
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