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Oil prices fail to rise over Saudi, Iran face off



Oil prices slid yesterday, erasing early gains, as fresh signs of an oversupplied crude market trumped concerns about increased tensions in the Middle East.

Light, sweet crude for February delivery recently fell 41 cents, or 1.1%, to $36.63 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 20 cents, or 0.5%, to $37.08 a barrel on ICE Futures Europe.

Prices climbed earlier yesterday on concerns about increased tensions in the Middle East. Rallies fueled by geopolitical concerns in the past two years have quickly fizzled as traders have bet that robust global production and ample inventories would mute the effect of any production outage. Heightened global unrest and still-high oil output could stoke further volatility in oil prices in the coming weeks.

Brent prices fell 35% last year, their third straight annual loss, as a global supply glut showed few signs of abating. U.S. prices posted a second straight annual loss for the first time since 1998.

More than 18 months into the crude-price rout, oil production remains high around the world as producers compete for market share, keeping global inventories high.

Saudi Arabia’s execution of a dissident cleric on Saturday inflamed sectarian tensions, sparking some worry among traders that crude output in the world’s most prolific oil-producing region could be threatened. Saudi Arabia and several of its allies have severed or downgraded diplomatic ties with Iran.

Bahrain and Sudan have severed diplomatic ties with Iran in solidarity with Saudi Arabia. The United Arab Emirates has downgraded its diplomatic team.

Saudi Arabia produced 10.2 million barrels a day of crude oil in November, or about 11% of global output of crude and related liquids, according to the International Energy Agency. Iran produced 2.9 million barrels a day of crude that month.

Some oil analysts and investors have argued for months that the low price of crude doesn’t adequately account for a possible supply disruption due to violence or unrest. The oil market has been vulnerable to sharp rebounds in recent months as traders who had bet on lower prices quickly reverse course.

Money managers including hedge funds added to their bets that oil prices would fall in the week ended Dec. 22, according to the most recent data from the Commodity Futures Trading Commission. Increased concerns about geopolitical conflicts could have prompted some traders to close out their bearish bets.

But further tension between Saudi Arabia and Iran could also expand the global glut of crude oil, weighing on prices, analysts said, as the two producers compete for market share. Iran is expected to increase its output by hundreds of thousands of barrels a day this year if international sanctions on the country are lifted, and Saudi Arabia has already expressed its unwillingness to cut production to make room for Iranian barrels.

The heightened tensions with Saudi Arabia could encourage Iran to accelerate its production increases, analysts said.

“For the smaller and more cash-strapped countries, such as Iran, every barrel they place in the market counts because that’s how they can get hard currency,” said Virendra Chauhan, an analyst at consulting firm Energy Aspects.

United Nations (UN) Secretary-General, Ban Ki-Moon yesterday urged Saudi Arabia and Iran to avoid any actions that could further exacerbate the situation between the two countries and in the region.

Ban made the call in a telephone call he made to Mr Abel bin Al-Jubeir, the Foreign Minister of Saudi Arabia and Mr Mohammad Zarif, the Iranian Foreign Minister.

According to a readout to UN correspondents in New York, Ban stressed the importance of continued constructive engagement by both countries in the interest of the region and beyond.

In his conversation with the Iranian foreign minister, Ban recalled his statement on the execution of Sheikh al-Nimr and 46 other prisoners by Saudi Arabia on Saturday.

He further recalled his condemnation of the attack at the Saudi embassy in Tehran and urged the foreign minister to take the necessary measures to protect diplomatic facilities in the country.

Speaking with the Saudi Foreign Minister Al-Jubeir, the secretary-general reiterated his views on capital punishment and his disappointment over the execution of al-Nimr, whose case he said was raised by the Saudi authorities on several occasions.

The secretary-general reiterated that the attack on the Saudi Embassy in Tehran was deplorable.

Ban said that the announcement of a break in Saudi diplomatic relations with Tehran was deeply worrying.

Regarding Yemen, the UN scribe urged Saudi Arabia to renew its commitment to a ceasefire.



WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners



…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live



The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured



…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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