Kuwait Ships Cooking Gas Out of Hormuz as Gulf Producers Go Dark
Kuwait has shipped a cargo of liquefied petroleum gas out of the Persian Gulf through the Strait of Hormuz using a tanker it controls, as more producers opt for clandestine tactics to get energy to markets. The Gas Umm Al Rowaisat, owned by state-owned Kuwait Petroleum Corp.’s shipping arm, transited the strait before transferring the LPG cargo to another vessel that is currently heading for India’s Paradip port, according to traders, Kpler Ltd., and ship-tracking data compiled by Bloomberg.
The tanker went dark after loading last month, reappearing near India on Sunday. This tactic has been employed by major producers including the United Arab Emirates, which are increasingly switching off location transponders on tankers they control to export crude and liquefied natural gas through the strait.
Gulf Producers’ Tactics
Major producers are resorting to clandestine tactics to ensure energy supplies reach markets. Rapidan Energy Group predicts around 2 million barrels of oil and related products are being ferried out of the Persian Gulf each day. This is well below pre-war levels, but still a significant volume.
Ciaran Tyler, a lead research analyst at Kpler, noted that with UAE-origin cargoes using this method successfully for the past few weeks, it doesn’t surprise him that others are following suit. The UAE started using this tactic last month to ensure LPG shipments to key buyer India, Tyler said.
Kuwait’s Role
Kuwait is also playing a role in these clandestine energy supplies. KPC didn’t respond to a request for comment, but the company has recently offered to sell its crude to refiners in Asia for the first time since the Iran war started, providing further evidence of flows getting out of the Gulf through Hormuz.
India’s Role
India is a key buyer of LPG and relied heavily on Persian Gulf producers for the product used primarily as a cooking gas in the Asian nation. The country has been forced to hike prices twice since the war cut off supplies. With its Automatic Identification System switched off, the Gas Umm Al Rowaisat loaded LPG on May 28 at Kuwait‘s Mina Al Ahmadi refinery, according to Kpler.
The vessel re-appeared on June 7 near Sikka along India’s northwest coast. Gas Umm Al Rowaisat then transferred its cargo to KPC-chartered supertanker Badrinath by ship-to-ship transfer, according to traders, ship-tracking data and Kpler. The vessel is currently signaling Paradip.
Conclusion
The tactics employed by Gulf producers are a testament to the challenges faced in getting energy supplies out of the region. As tensions continue to rise, it remains to be seen how these clandestine operations will impact global energy markets.
Original Article: Kuwait Ships Cooking Gas Out of Hormuz as Gulf Producers Go Dark | Financial Post — Financialpost