After a series of attacks, the demand for ship supply services in the port of Fujairah declined

The demand for ship supply services in the port of Fujairah in the United Arab Emirates, one of the main ports for shipping and ship services near the Strait of Hormuz, has declined, with some shipping companies moving away from the Gulf as a whole, Bloomberg quoted traders dealing in the regional oil market In the bay.

International oil tankers have been reluctant to send their carriers to major shipping ports in the Middle East after a series of attacks on a number of tankers over the past two months in the Gulf waters, as regional tensions mount and the risk of tankers operate in the region.

The attack on tankers in the Gulf of Oman in mid-June, the second targeted tankers near the Strait of Hormuz in a month, preceded by an attack on oil tankers in the Emirate of Fujairah in the UAE.

"There are expectations of further deterioration before it starts to improve," says Matt Stanley, a broker at Star Fuels, one of Dubai's largest oil trading companies. "Minah Fujairah is experiencing a significant drop in demand due to higher insurance costs for tankers Oil against the dangers of war ".

Retreat
It was not entirely clear why the decline was caused by tanker companies avoiding the Middle East as a whole or the port of Fujairah in particular.

Since the first attack on oil tankers in Fujairah in early May, insurance costs for tankers have risen, while concern has prompted some owners to stop operating in the Gulf. Front Line Limited temporarily suspended its activities in the Gulf region.

The port of Fujairah provides oil tankers with fuel, supplies and maintenance as they cross from the Gulf to oil refineries around the world across the Strait of Hormuz.

Local officials at the port say there has been no retreat in the re-supply of ships and tankers from existing facilities in Gulf ports themselves, but there has been some decline in trade.

Although there is no official data on oil sales in the Gulf region today, traders and brokers say they have fallen 15% since the May attacks, despite a sharp divergence in estimates between brokers and traders, according to Bloomberg.

Demand for crude warehouse services fell more than 30 percent to about 500,000 tons a month, a broker said.

According to estimates of "global energy data", sales in the region fell by 650 thousand tons per month, or 13% compared to the volume of sales before the attacks on tankers. Sales had reached one million tons per month in 2016, before the decline began since that time.

Gulf port officials and authorities have declined to comment on the size of the Offshore Shore trade in the Gulf and catering after tanker attacks, the Bloomberg agency said.

"The amount of oil products entering or leaving storage facilities at Fujairah Port reached its highest level this year in June," said William Lisset, operations manager at Fujairah Oil Depot Station, adding that the data does not include " Shore ".

Environmental rules
The economic adviser to the government of Fujairah Salem Khalil said that any decline in the quantities of petroleum products stored in warehouses, may be the result of new environmental rules that will come into force next year. Fujairah expects high demand for port services in 2020.

According to Bloomberg, the recent bombings are only the latest challenge facing the port of Fujairah, which in recent years has become a hub for the trade of crude oil and petroleum products scheduled, in addition to its traditional role as a center for re-supply of transit vessels.

This comes as Iran - a major producer of high sulfur fuel oil used by most ships today - is under pressure from US sanctions that include punishing companies or countries that buy Iranian oil and its products.

At the same time, global demand for this type of fuel is expected to decline from next year as new international environmental rules enter into force. In accordance with these rules, IMO would be required either to use less polluting fuels or to treat the tailings produced by them.

Traders say ships and tankers will not completely abandon the port of Fujairah because there are not many alternatives capable of providing the same wide range of services in the region. Among the possible alternatives for shipping companies is to travel to Singapore on a return trip to Asia. This may be a good option for companies if their vessels go to West Africa to complete their loading.

At the same time, ships heading to the port of Fujairah for fuel and services only may find more alternatives, traders say. However, most of the vessels moving in the Gulf to transport crude oil or petroleum products will continue to visit the port of Fujairah because they will continue to pay higher insurance fees to cross the Strait of Hormuz, whether they benefit from the services of the UAE port or look for another alternative port.