Somali Pirates Seize US-Bound Oil Tanker

Posted by Kristin Miller on December 3, 2009 at 10:38 am

The Maran Centaurus pictured under its previous name, the Astro Centaurus. (image: timesonline.co.uk)

Somali pirates seized a huge prize on Monday, Bloomberg reported; the pirates captured the Greek-flagged, 300,000-ton, Very Large Crude Carrier (VLCC) the Maran Centaurus. The captain and crew are reportedly being well treated and the ship is currently anchored off the piracy hotbed of Hobyo, Somalia, awaiting ransom negotiations.

The Centaurus was fully loaded with 2 million barrels of oil and traveling through the dangerous waters of the Indian Ocean, 600 miles off the Seychelles, when the attack occurred. While EU Naval forces have stepped up anti-piracy measures around the horn of Africa and in the Gulf of Aden, according to the London Times, the result has been that pirates are now stalking ships farther and farther out to sea.

Early last month, Somali bandits attacked a ship 1,000 miles off the coast. While there is less merchant traffic through the Indian Ocean than through the Gulf of Aden, which feeds 20,000 ships a year into the Suez Canal, fewer ships means fewer naval patrols, giving pirates virtually free reign over an area the size of Europe. Pirates are also more likely to be successful in an attack when there is less chance of another ship of any kind in the vicinity to respond to distress signals.

Though the price of crude rose on December 1, the day after the seizure, the incident had a muted effect—more attention was paid to Iran’s detention of a British racing yacht. But the threat of piracy can have a more subtle effect on prices, not because of the loss of the oil on any given—despite the Centaurus’ massive carrying capacity, its cargo is a drop in the bucket of the world oil supply—nor with the ransom finally paid for the ship and crew, but through investors anticipating such future disruptions in the supply of oil. While the Somali pirates are already well known, and the risks of their actions in some measure already factored into oil prices, more surprising disruptions can still have a significant psychological impact on investors and cause prices to spike. For example, the November 2008 capture of the Sirius Star, a Saudi tanker and the only ship larger than the Centaurus to ever be hijacked, drove prices of crude up by $1.

These factors beg the question of what should or can be done to combat piracy’s evolution, particularly when it can have such an impact on global markets. Naval patrols can only accomplish so much—a commander quoted by the Times likened patrolling the Somalian coast to “policing the East Coast of America with five police cars”—and too much firepower on board is a major hazard with such combustible and expensive cargo. Recently, though, several ships have defended themselves with added security personnel and alternative weapons such as sonic cannons. In the past month, the cruise ship Seaborn Spirit and the cargo ship Maersk Alabama have both successfully fended off attackers with Long-Range Acoustic Devices (LRADs), which emit directed pulses of sound loud enough to damage hearing and even addle the vision of anyone within range. The Centaurus, by contrast, did not even have armed security personnel aboard.