Strait of Hormuz crisis triggers fears of surge in costs of oil, LNG, insurance |
Strait of Hormuz crisis triggers cost surge fears
KARACHI: Escalating military conflict in the Middle East and the closure of the Strait of Hormuz have forced global shipping companies to adopt precautionary measures for the movement of goods by sea as well as for their staff and crew, while some firms have indicated the imposition of war-risk and contingency surcharges on cargo.
The Strait of Hormuz is a strategic maritime corridor through which nearly 25 per cent of the world’s oil passes. Any disruption to traffic through the narrow passage linking the Persian Gulf with the Gulf of Oman could lead to increases in crude oil and LNG prices as well as higher shipping insurance costs.
“Given that a large proportion of Pakistan’s trade transits through the Gulf region and the fact that most major shipping lines have already announced service disruptions, Pakistan’s trade will suffer delays and additional costs,” Pakistan Ships’ Agents Association (PSAA) Chairman Mohammad A. Rajpar told Dawn, warning that “there is also a threat of disruption to our LNG and oil supplies”.
Karachi Gateway Terminal Limited (KGTL), in an advisory, said shipping lines operating Gulf services had temporarily suspended booking acceptance from Pakistan and placed their services on hold until further notice. Accordingly, KGTL has suspended the acceptance of all new export cargo for Gulf services with immediate effect.
Pakistan’s trade likely to face delays, higher freight and insurance costs
Pakistan’s trade likely to face delays, higher freight and insurance costs
Hapag-Lloyd, a maritime transport company, stated on its website that due to operational and security constraints in the Upper Gulf region, measures had been taken to ensure cargo safety, secure equipment placement and maintain operational standards.
The company has implemented a........