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Shipping News – Floating Storage/Tanker Rates & Pirate Update
For years there has been a large supply of crude floating on big oil
tankers. A significant portion of this is not under contract and does
not have a specific delivery date. Typically these vessels head for Asia
or the Americas. They do it at slow speed. They wait for contact from
the owners that the crude has been sold and a delivery date has been
set. When that happens the ship picks up speed and heads to the intended
port.
It is my understanding from talking to some shippers that this is
happening in a very big way as I write. It makes perfect sense. If you
were China Inc. and worried this morning about the predictability of
supply, the first thing you would do would be to secure as much of the
floating crude that was out there. We saw this same pattern in the early
days of Egypt. Back then the rush was to bulk up on supplies of wheat.
Today it is crude.
Two consequences from this. First a minor one. The cost of chartering an
oil tanker has falling from a high of $200,000 per day to as low at
$20,000 of late. We are going straight up on this number. Transportation
is part of the cost we pay to import the 10mm barrels of oil a day we
consume. This increased cost will flow very quickly into the cost of
gas.
More importantly is that the cost of spot crude (not futures) is going
to skyrocket. It already has. Look at the price being paid for spot
crude at the Gulf of Mexico. It opened this morning at $112. There is a
$20 premium for physical crude versus WTI Should the current
uncertainties on supply continue (or worsen) $4 gas in the next few
months is a foregone conclusion.
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PIRATE ACTION
So the Somali pirates killed the four Americans on the sailing ship.
This appears to have been prompted as a result of some effort by US
forces to liberate the ship before it made land. As of now the report is
that all of the pirates were captured or killed.
This is a terrible result. I wrote about this on February 11th. I concluded that report with the following:
Military action is not far off.
The apparent failure of US Special Ops to save the Americans confirms my prior observation. The only solution is boots on the ground. Keep
in mind that the pirates are sitting on (at least) 2 million barrels of
crude. Enough to despoil a good chunk of the African coastline for a
very long time.
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A suggestion.
Look at the vessels they have captured. Acquire a few of each type. Outfit them as "commerce raiders" with the best armament that can be hidden per vessel type. Send them through the area one at a time manned by Russian Spetsnaz. Keep operation quiet as possible. Pirate vessels attacking these fake civilian ships are simply sunk, no prisoners taken, no public reports. Repaint reflag and repeat.
Our freighters dump toxic waste into the fishing waters off Somalia. We've destroyed their livelihood, leaving them with a couple of options--starve or become pirates to feed the family.
Quite a lot of stupid comments.
So clean Somalia of Somalians? And what after that?
People missed the one lesson of the nineteen century.
The positive side is that it hints at what is going to happen when US citizens are going to be forced to move out of the US because they can no longer afford living in the US. Going to be large scale slaughters...
There are no better ways to breed pirates than starve or nuke the world. They come back in droves..bevy of black swans...Remember the cross...on which the hides of global criminals will be nailed is being assembled right now in the third world. There are no frontiers once the tsunami of the grapes of wrath unfurls. Somalian pirates are just the hors d'oeuvres...like the Talibans and their pervasive regressionary culture, fast becoming antidote to criminal globalisation to save the 'great oil patch'; created courtesy of surrogate pakistan president...Zia ul Haq. Himself faithful servant of said kleptocracy, like Pinochet of Chile. Except that Zia died mysteriously in plane crash. Maybe for having betrayed his masters in supporting Hechmatyar, Iranophile renegade Taliban, as well, for having launched the nuke program in vassal Pakistan, without authorisation from emperor in Wash. DC. Complex systems play themselves out to end game for one reason : extreme 'oneway only' hubris at the very center of empire. History forever repeats itself. That doesn't mean its 'Alleluia' time for the starving masses. One empire replaces another. Just too bad if you're on the wrong team when the ex-barbarians become civilisation for the new century....hey Mr Tambourine man play a song for me... Not to worry, this century is still in transition mode...no clear winners yet in sight..
Privateering against the pirates won't work.
Most nations won't even allow their merchant vessels to have armed guards or usable crew-served weapons on board (such as Oerlikon 20mm cannon or twin-barrel .50 caliber MG which could do a very nice number on a pirate "skiff").
The solution is simple but expensive....
An armed, all-out amphibious assault on the Puntland coast of Somalia, with one very simple rule of engagement.... all inhabitants, their villages, structures, vessels, and vehicles are to be considered Military Targets.
The six hundred or so Filipino or Bangladeshi crewmen of the 30 or so hijacked vessels currently held hostage will have to be written off as acceptable "collateral damage"..as will any ships anchored in pirate ports that cannot be commandeered by Naval crews and gotten under way.
The entire thrust of the operation should be to render the Somali coast both uninhabited and uninhabitable..destroy all vessels and vehicles, and render any fertile soil infertile with the old Rome vs. Carthage trick of sowing salt in the fields..
Finally, give any Westerners foolish enough to still remain in Mogadishu 48 hours to get out of town... and then turn the city into "glass that glows in the dark"..
In fact, we could probably hire the Russians to do the whole operation for less than the cost of ransom for ten cargo vessels... alone among "civilized" nations, they seem to have the right attitude when it comes to dealing with this vermin...
Make an example of them, and you won't get a repeat...
Anyone wanna start a privateering corporation for pirate management and take it public? Bruce what's the market cap for pirate management services?
Rising. Fast...
Arrrrgh, a lot of unknowns.
Supposedly the American sailors were headed to Djibouti after leaving a sailboat convoy. Not sensible, every human knows there are pirates in the Gulf of Arabia.
Apparently there was a battle between the pirates on the captured ship w/ at least 2 pirates killed by other pirates. They must have discovered the sailor's liquor cabinet.
The pirates fired RPGs @ the shadowing US warship.
The pirates are stealthy b/c they can immerse themselves among the hundreds of other ships fishing illegaly and dumping garbage in the Gulf. Neither Somalia nor Yemen control their offshore waters. It's a big chunk of territory and the naval forces can only patrol a small part of it at any given time.
The US does not have a stealthy alternative to the pirates. US naval ships stick out like a thumb plus helicopters, fast attack boats, etc.
The solution is escorted convoys along with an international agreement to limit fishing and waste dumping.
Escorts could be drones launched from cargo ships, small gunboats and 'picket' vessels set in place as decoys. Bombing Somalia is a bad idea, the incompetent US military would hit every wedding party in the country and miss all the pirates.
An effective govt. in Somalia would also help but US/UN is obsessesed w/ Islamists and suppressing Somalian demand so it can be exported to the US. Piracy is simply a cost associated w/ neo- liberalism.
We import 10 million barrels a day? How many tankers is that?
Hold on...something good can come from this...We (the USA) can now go THERE and start another war.....blow the whole place up and then rebuild it all.....of course along with a shiny new military base!!!
all at taxpayers expense of course......
yeah these morons were asking to get fucked up sailing in that part of the world handing out bibles...what the fuck...WHO is that impossibly stupid?
WAIT..... I have an answer...the stupid bitch that got raped last week in Egypt...what great place for a blonde woman to be !! in the middle of all that shit....like my Grandpa used to say "the fool killer isnt always busy someplace else"....
wow...is this the history channel? do you two EVER leave your mom`s basement?
bark, saw your three posts in a row:
but I was wondering about, well, you and your 'basement'.
- Ned
Couldn't disagree more with respect to "boots on the ground." You seem awfully quick to throw men at a problem when large bombs would do the trick.
The solution to the pirate problem is very simple and has been alluded to by a number of generals. Regular strafing runs against all boats in the water that can be reasonably determined to contain pirates, same is true for all boats on the beaches.
Each time an American ship, of any kind, is hassled by these cretins, grab the boat, identify the men and their families, and drop incendiaries on the entire neighborhood. The pirates will stop, eventually. Sadly, we do not have any testicular mass on 1600 Penn. Ave or further up the road to make that happen.
This is incompetence, bordering on absurd. First news of successful S Koreans rescue off Somalia last month, followed quickly by the Malaysian navy's rescue of a tanker and crew in the same area. And now the world's most expensive navy (and airforce and marines and ...) got the hostages killed while attempting a rescue? I am sure there will be good excuses; but this is becoming like Carter's Teheran or Black hawk down. One has to wonder, $701b budget and nothing but f$#@-ups. And what is the total annual budget of the malaysian armed forces? US$3b (including acquisitions of new systems). Like my american colleague liked to tell us, you people pay peanuts, get monkeys! Must be some really expensive peanuts they paid there.
Reading through and referencing, yup, the US paid for the finest fuck up's to graduate from dropping out of high school.
Bruce,
I tried to post this at your site but it didn't work. It will go over here better though.
The solution to the pirate problem:
If hostages are killed, all of the pirates must be killed. There and now.
Every pirate thinks that HE is the one who will live in a confrontation with a military vessel. Every pirate must surrender when confronted with the military. If hostages are killed they all must die.
This will return the problem to one of numbers. Numbers of pirates vs. numbers of military. Loss of ships vs. cost of insurance, etc...
gh
Precedent...T. Jefferson had to handle this in the early 1800s....Barbary Coast. Solution is real simple...screw with an American ship and we send in a couple of Predators or a cruise missile to take out the whole damn port. We can warn people in advance...send in a squad of fighter jets, drop some leaflets in Piratese....If you do not support the thugs get out of town. Afterwards.........so sorry.
Secondly, idiots that travel in this part of the world on private yachts are just looking for trouble, but to be distributing bibles in the peaceful land of Islam......really !
DJ: "Barbary Coast."
Solution was real simple then. One Marine Lieutenand, seven Marines, two Mids, and a bunch of camels and others did what no predator or cruise missile could do. They took and kept the objective.
Wonder what would have happened in 'Blackhawk Down' if it hadn't been that qwm Les Aspin had not been in charge?
Solution could be real simple now, as well.
- Ned
{Noting all of the 1800's action on the 'Barbary Coast' and comparing to current events.}
So 9 high school fuck ups decided on the action on the floor?
Good, this puts things in perspective. We all know who to blame. Their useless fuck up parents for raising morons. At least North American gang member would have known when to keep their fucking guns at arms. Swear to fucking christ...thought they sent officiers, not fuck up crows feet on a pay-way college scheme.
So it wasn't Spec OP's, just heel-toe fuck'ups on duty passed through on the army "pass'em if you got 'em duty". Oh well...their career. I wish them the best of luck in the Burger King of their choice. Good eyes, good bodies, no brains.
Let's wait for the autopsy now to count their own bullets in a hail of "patriot" justice. Fucking morons nearly killed anyone doing engineering duty in Bosnia by their act of "patriotism" while trying to unrig a door/school yard/car/house/dog/person. Fucking meat heads.
Nothing needs to explained anymore. ROTC paid for the engineering, but the experience never left me with the fulfillment of morons leaving how stupid people are. BTW most of those deaths in Bosnia 20 year ago were fuck nuts killing themselves in drunk driving accidents, not errant sniper fire. Most humans have the common sense to avoid fucking with each other.
distributing bibles in the peaceful land of Islam
Is that the story now? The media understand the pirates aren't Muslim. Somalia has been in a semi-tribal war for twenty years because of the tribal factions in the country regarding every known africa religion on the map right?
Oh boy...a 6 year old could spin this shit better
If we could just get them to READ the Bibles, they would find out that stealing is a sin, and mend their ways! Looks like the FRNs I've reserved to buy some Intelligence are gonna do some more waitin'!
Ninjas > Pirates bitchez
The shortage of ninjas to control the pirate population has been discussed in great length before.
MSM must be notified.
Hmm, a Ninja shortage and the USA with around 20% unemployment...
Arrrrrr. Shiver me timbers. Slewie The Pi-rat has been MIA for days, matie. Is he sailing the high seas looking for bootie?
He's leaving a string of pearls on the booty and chests everywhere he can find?
Man, there's a mental picture I can do without.
I think he's still doing some med adjusting. There is a dark side to mania.
How about building a dozen or so WWII-type diesel submarines, equipping them with GPS, homing torpedoes and deck guns, and turning them loose with no rules of engagement other than "sink the enemy's ships"? Maybe the Germans would be interested in participating in the operation. Hell yes, you would make YouTube videos of pirate ship sinkings, and the Germans could provide excited propagandistic commentaries. "Der Pirat Schiff sinkt, geht seine barbarischen Besatzung in die trüben Wasser!"
"Der Pirat Schiff sinkt, get Seine barbarischen Besatzung in die truben Wasser!
As someone else said ..a new movie..."Das Boot Zwei"
"Das Boot Zwei"
WTI (and its counterpart USO) will catch up in the next few days and rise 20%.
These things seldom remain out of balance for long.
As for the "pirates" why were there any surviving pirates? Why feed them for four years while they are being tried in the Hague?
Intelligence.
Interrogation.
Could be very worthwhile.
There is a link between the revolutions we're seeing and the actions of the pirates. The breakdown of "control from the top" management of our global affairs, and attacks against those that represent the "top", the haves, the elitists.
If you noticed, the protesting Libyans, were headed for the military arsenals,..they are not going to continue to fight with no weapons. Same for other acts of defiance against-the-Man, time to stratergize, arm, and get mititary people involved, helping the protesters.
I predict rapid,upward, escalation, in the means, methods of resistance, and a rise in worldwide rebellion against the "haves" and their protectors, enablers.
And for the tough guys writing here, "kill them all", they will be watching who fires on them, who gave the orders, and you will soon be a target for they very action you wished on them.
This is far bigger than each single event would indicate.
Liked your piece on oil.
I'm sure you're right, there must be a good number of oil tankers that have recently been told to rev up those engines and get their butts to China. But I find it hard to believe that oil tankers have been putting around aimlessly. If there's no buyer, or you want to wait for better prices, you park.
Also, keep in mind that waterborne oil trade volumes are still well below 2008 levels. Because of Opec quotas, the oil market is much tighter than the oil tanker market.
As for pirates, there's a passage in Polybius in which a Roman delegation, circa 230 bc if my memory serves me right, complains to the Illyrian Queen about Illyrian pirates. She says, we don't take responsibility. The Romans say, well, we intend to change that. It was a key moment in the rise of Rome, which at that time was no more than a regional power within Italy.
I guess what I'm saying is, taking care of pirates and imperialism go hand in hand. If you take it on yourself to go after the pirates, you'll likely end up with an empire. And if you won't or can't deal with the pirates, then you won't have an empire much longer.
Edit: And one more thought on tankers. What you see now is a rush to secure oil supplies in case Libya stops shipping. That tightens the oil and tanker markets. But if Libya stops shipping, then you'd have a weird situation of some tankers in a hurry and others sitting idle with no oil to fill 'em up with. The '70s nostalgia craze rolls on.
Bought a Prius under "cash for clunkers" so Iam really paying $2.00 a gallon at the pump and saved $ 5,000 in purchase price of car. America will have to adjust but will not be easy.
Cash for clunkers... so appropriate.
Glad we could all chip in on that for you.
The level of smug in the air is undeniable. Bound to lead to people stopping to smell their own gas at this point...it's undeniable.
I am so very unimpressed. Let see you get 40 mpg, and you paid $20,000.
I have a 1955 356A Porsche that I bought in college (many years ago, it was used and a beater, I paid $800 for her) and still drive her every day in the summer, she has over 350,000 miles on her, made a 2000 mile trip in it this fall, it got 36 mpg, that is with 1955 technology!!!!
Let see, my 1955 car gets 4 mpg less than your "new prius"..... Don't you think we could do better after, what 60 years, green technology my ass, you should be embarrassed!!!!
A friend of mine took his 356 B, and put a bio diesel VW motor in it (after the original roller crank, shit the bed one to many times), he gets 60-70 mpg!!!!! He is doing a little cross country road trip right now....
http://www.travelblog.org/Bloggers/vonbondo/
$4 gas in the next few months is a foregone conclusion.
How about this Friday?
maybe piracy wouldnt be the problem it is if we werent basically fishing their shores empty, dumping chemical waste in their waters, and basically robbing the entire continent blind
bankers arent the only ones with government sanctioned theft as a business model
So they're only resorting to crime because they're hungry? They're really just good people inside?
Send them some processed grain shipments, laced with Cadmium. End of problems.
How very humanitarian of you LFM.
Here is a question for you. Whats worse than pirates? How about genocidal maniacs? Your solution makes Hitler look sane.
A little history on the Somali pirates - not an a perfect source but gives some background:
http://www.time.com/time/world/article/0,8599,1892376,00.html
Also read something a while ago that pirates did play a role in the American revolution. For which side? Probably both.
The pirate problem is incredibly simple to fix. Simply inform Somalis that any boat x number of miles off the coast will be strafed and sunk. Give them reasonable room for fishing. Inform the commercial and yachting industry of same. Then conduct daily flights and sink anything out of bounds.
This should have been done when the problem first got started. Now the pirates have hundreds of hostages and several large ships. This is what happens when you dick around with a problem instead of solving it.
The Russians know how to do it. As I recall, in the last pirate event they were involved with, there were NO reported prisoners. The US solves problems like there is an infinite supply of money and resources!
Ah yes, so simple. Machine gun unidentified boats in international waters. That plan will never end in tragedy!
Thats why other countries love fighting alongside the Americans. Always the excitement of not knowing if the enemy or your "allies" are going to kill you.
George Patton: "I would rather have a German Division in front of me than a French Division behind me."
The way we are going , it will not be long before you will see senior pirates in their 60s and 70s off the coast of Florida plundering big yachts out of Miami Beach. Unfortunatly many senior pirates will die of natural causes before recieving ransoms . Their skull and bones flag will be especially meaningful