Syrian crisis – what next?
The Syrian problem remains unresolved. The UK Government decided last week not to participate in military strikes against the Assad regime, President Obama has now decided to follow suit and go to Congress before taking any action and the French Government has also discussed the subject at its Government, but President Hollande is determined to support the US. Meanwhile President Putin has now indicated that Russia would support a UN resolution – although it is still unclear what China would do. So the situation remains unresolved – and it looks as is the Syrian problem will be with us for a few more months.
The main problem is that – should a Syria military intervention be sanctioned by the UN, or the US takes the decision to go ahead alone without UN agreement, consequences could spread all around the region, resulting in two major factors for the maritime world.
Firstly, the closure of the Suez Canal is now a real threat, the first such possibility for many years. Those of us having long careers in the marine industry can only shudder about this situation – we remember all too well the results of previous closures. Of course, the Syrian problem, even if military action is taken, may not result in closure – however, adding the current political problems in Egypt, the possibility may well become a reality. Some 1.4m bbls/d transit the Suez Canal – so it is clear that any closure would have a significant affect upon the oil and tanker markets.
Secondly, the subsequent problems facing the Middle East if such military action is taken will have a substantial affect upon tanker market. We have already seen Saudi Arabia start pumping oil at a record pace of above 10m barrels/day, which in turn could create havoc in the tanker market, as major oil production countries could face output issues. According to the latest weekly report from London-based shipbroker Gibsons, “the price of oil will always be at the mercy of global political tensions. Building hostility in North Africa and the Middle East has forced the price of crude oil up to a six month high over the course of the past week. It has also driven Brent prices up to $116.50/bbl and bunker prices up to $618/tonne at Fujairah.”
According to Gibsons, “Although Syria alone is not a great threat to the tanker industry – the crisis could easily spill over to neighbouring Middle Eastern nations, of which a combined estimate of 35% of world crude oil is produced. Oil production in Syria, pre-civil war was only 370,000 bbls/d, this figure having now fallen to 70,000 bbls/d.
Whatever the outcome of discussions between the stronger powers of this world, and much discussion will be underway this week at the G20 meeting in St Petersburg, the affect upon the world, if military action is taken, will be dramatic. Having said that, any regime using chemical weapons against its own people or other countries – must realise the consequences. It’s a major dilemma for the major powers.
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