NEW SUEZ CANAL TO BENEFIT FROM ‘ONE BELT ONE ROAD’ AND AN OPENED UP IRAN

February 23, 2016 - London - The new deeper Suez Canal will be a beneficiary of the ‘One Belt One Road’ initiative taken by China’s leader, Xi Jinping, especially when it comes to the opening up of the Iranian market following the lifting of international sanctions and the moving into importance of the Indian refinery markets, according to a press release statement by Denis Petropoulos, President of Braemar Shipping Services Asia.

Speaking at the 1st Suez Canal Global Conference in Cairo, Mr Petropoulos said ‘One Belt One Road’ was not just about China but reached into around 60 countries: “many with increasing energy needs, and the Suez Canal playing its very essential part.”

Iran is probably the most notable frontier for new business within ‘One Belt One Road’, delegates were told. “Its trading alliances in Asia remain strong but with the lifting of sanctions the opportunities for Iran are opened further, with long standing historical trading partners in Southern Europe and their demand for Iranian crude oil, all likely to be transported through the Suez Canal and the Sumed pipeline,” said Mr Petropoulos.

“In the 1970s and 1980s, the trend for crude oil produced in the Middle East was for Western demand but by the turn of this century the trend reversed with Middle East producers supplying the East. However Middle East refineries are also producing products for the region and are now exporting large amounts of products to global destinations as profitable trade, as well as a hedge to reduction in OPEC crude quotas. North East Asia is also producing gasoil which will find itself in the West. Major traders are fixing new building aframaxes and suezmaxes to load cargos of gasoil from refineries in Japan and Korea all transiting the Suez Canal,” he said.

As Mr Petropoulos stressed, in addition, India’s refinery programmes in the private sector have been very forward looking and they now export products with limited or reduced refinery capacity, particularly in North West Europe. “Those cargoes will transit the Suez Canal. With the demand for power combined with emissions, the LNG space is growing significantly and there has been an increase in LNG transiting the Suez Canal in the last 10 years.”

Since the completion of the new dual carriage, the new Suez Canal will be able to handle almost twice the traffic, delegates heard. “And providing it remains commercially viable, this will lead to greater numbers of vessels navigating at both Suez and Port Said. In any environment where there is increased traffic there is increased risk of incident,” he warned.

Jeff Wilson, Director of Marine Consulting (Europe) at Braemar Salvage Association, told delegates that the planned increase in traffic that will come from the development of the ‘One Belt One Road’ “will inevitably result in more vessels transiting and awaiting transit of the Canal at either end, and this will require careful planning and handling to mitigate the risk of increased traffic.”

He said: “It may be useful at this point to remind ourselves of the most common types of marine casualty and consider how that feeds into a discussion on mitigating that risk. We’ve been gathering data on casualties since the business started, and we still maintain a casualty database that allows our friends and clients to accurately identify the risks that are relevant to their work or their projects.”

Braemar Shipping Services Plc is a leading international provider of broking, consultancy, technical and other services to the shipping, marine, energy and insurance industries. Its shares are listed in the premium segment of the Official List of the UK Listing Authority and are admitted to trading on the London Stock Exchange's Main Market for listed securities in the Industrial Transport Sector.
www.braemarplc.com It business is organised into four divisions: Shipbroking, Technical, Logistics and Environmental.