Gulf oil-producing countries continue to export crude oil through high-risk shuttle operations despite threats from Iran

(New York = Yonhap News) Correspondent Kim Yeon-sook = The Wall Street Journal (WSJ) reported on the 5th (local time) that oil-producing countries in the Gulf region are continuing high-risk 'shuttle operations' to export crude oil despite Iran's military threats and successive attacks on merchant ships.

According to reports, oil-producing countries in the Gulf region, such as Saudi Arabia, are continuing to export by sending very large oil tankers (VLCCs) into the Strait of Hormuz to load crude oil at the port, and then transferring the crude oil to other ships waiting outside the strait.

This method emerged after the outbreak of the US-Iran war, as crude oil buyers in Asia and other countries were reluctant to send their ships to the Gulf.

These oil-producing countries appear to have decided that it is economically better to pay huge transportation costs rather than suspend crude oil exports, even as tensions in the Strait of Hormuz are heightened.

The cost of operating such a shuttle amounts to 30 to 40 million dollars (40.3 billion to 53.7 billion won). Excluding insurance premiums, this amounts to an additional cost of about $15 to $20 (20,000 to 27,000 won) per barrel.

Oil tanker freight rates traveling to and from the Strait of Hormuz also soared.

The charter fee for ultra-large oil tankers transporting crude oil from the Gulf region to China increased from $231,400 per day just before the war to over $1.2 million per day at the end of September.

Unconventional rewards are also being given to sailors who take risks.

Seafarers from India, the Philippines, China, etc. receive a salary that is two to three times their normal monthly salary. One crew hiring company offered up to $25,000 (about 34 million won) as a round-trip voyage bonus. This is more than a year’s worth of wages for agency employees.

Shipping broker E.A. “It’s nothing compared to the millions of dollars that shipowners are making today,” said Gibson executive Richard Matthews.

The spread of this transportation method was also influenced by the fact that Saudi Arabia's east-west oil pipeline was disrupted due to drone attacks.

The East-West Oil Pipeline, a key route for transporting crude oil bypassing the Strait of Hormuz, can transport up to 7 million barrels per day.

Although exports through the East-West oil pipeline have partially resumed, some analysts say that Saudi Arabia is likely to rely on shuttle operations for the time being due to limitations in transportation capacity.

The risk is still great.

When ships pass through the strait, they sail at night with their windows closed and all lights turned off. It is said that during navigation, the GPS signal is lost for several hours, so the ship's location is determined by using radar signals to calculate the angle and distance to the island and cape.

According to the UK Maritime Trade Organization (UKMTO), seven ships have been attacked near the Strait of Hormuz since the 28th of last month.

In the past two weeks, nine merchant ships have been attacked near the strait, with two sailors injured and one killed.