FSO Safer - a disaster waiting to happen.

Hidden away in the news is a disaster waiting to happen.?

Back in 2021, the Ever Given blocked the Suez Canal for six days. In the world of logistics, this felt like six months as critical supplies were blocked en route.??

Now we have FSO Safer tanker. It was built in the 70s as an oil tanker and then in the 80s converted into an unpropelled storage vessel. It is loaded with 1.14 million barrels of oil. AND there is 17,000 barrels of crude oil in pipelines from the tanker under the Red Sea. According to Lloyd’s List is has been uninsured since 2016.??

In 2020 a leak was spotted using satellite technology, and the UN warned that this leak could spill four times as much oil as the Exxon Valdez if it is not contained.?

A May 2022 conference attempted to raise money to pump some of the oil into another ship, leaving the new ship under Houthi control. This wouldn’t solve the problem, but hopefully, give us vital breathing space to solve the problem.??

However, funding levels weren’t as anticipated, so the UN ended up launching a crowdfunding campaign to get the money, which delayed the start. It seems bonkers that such a serious problem is being funded in the same way kids fund their gap years. The delays impacted the operation, as the price of the VLCC that would be used increased, and the price of oil shot down, making the operation unviable and now unattractive to the Houthis.?

Some observers believe the Houthis have now laid mines in the waters around the Safer. Albeit these are rumors, but scary ones that make the situation even more complex, but also even more perilous.??

So, what will be done about it? It feels very much like ignoring the problem and keeping our fingers crossed because it is difficult.??

But without intervention, it feels very likely the tanker will explode or at best just spill its contents and cause widespread logistics disruptions (closing the ports of Hudaydah and As-Salif) and most horrifically a catastrophic environmental and humanitarian crisis. We would see desperately needed food aid and fuel halted. 300,000 children would be at risk of dying from starvation or disease according to UNICEF just from the closure of Hudaydah port alone. As well as the suspension of the fishing industry which livelihoods are dependent on.??

Paul Horsman, from Greenpeace, was quoted in the news saying: the technology exists to transfer the oil on board — still technically owned by the internationally recognized government — into another vessel. The problem, he said, is a “lack of political will” to solve the issue.?

The UN desperately needs to regroup and develop a new plan, one that gets the appropriate funding at the appropriate speed. I appreciate the problems are manifold and complex, but when are political issues dealt with by the UN not? What has prompted me to write is that there is simply not enough visibility of this story in the news, and unfortunately, it feels like we need the pressure that comes from visibility to make the UN act quickly.?

Can I plead with international governments to help? Even if the environmental and humanitarian aspects of this disaster waiting to happen can’t stir you to dig deep, from a trade point of view it is anticipated it will cost the world nearly $10bn per day (Greenpeace), and it is predicted the Safer could slow or stop trade through the Red Sea for weeks or even months.?

For any of our customers who are using the Suez, and if this is the first you are reading about this. I am hopeful the UN will act and divert this catastrophe, but wta group will keep you informed on the developments through our Market Update, and your Customer Success Managers are on hand to develop contingency strategies with you, to minimize any impact.?