Somali Pirates Make Us Rethink Cruise Through Gulf Of Aden

We remain transfixed by the Somali pirates. We just lost a bunch of time looking at this great Wall Street Journal map that shows all the Somali hijackings. And we also lost some time cancelling The Business Sheet’s yearly “Cruise Through the Gulf of Aden.” All for the best, as the economy is making us think we should cut our costs anyway.

Speaking of the economy. Remember those falling oil prices? Well thanks to these pirates, the price might shoot back up, because companies are going to need new routes and more security.

Bloomberg: The hijacking of a Saudi Arabian supertanker off the east coast of Africa may spur oil and shipping companies to step up security and use alternative routes, delaying cargoes to Europe and the U.S., analysts said.

“It seems reasonable to travel with additional security measures that provide an adequate response given the advanced armory and boats the pirates possess,” Cyril Widdershoven, an Amsterdam-based energy analyst at Deloitte, said today in an interview. “It may take up to four weeks longer for crude to reach its destination if routes are diverted.”

…”Companies may see insurance premiums rise because of this event,” John Mitchell, an associate research fellow at the London-based research organisation, said today in an interview. “This is clearly a security issue and it could lead to higher costs.”

Frontline Ltd., the world’s largest owner of supertankers, is considering routing its ships away from Somalia.

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