Lebanon-Israel conflict keeps shipowners away from Syrian waters

London (Platts)--21Jul2006

Shipowners are refusing to send tankers to Syria on fears of safety
in waters close to the rapidly escalating conflict between Israel and Lebanon,
that has killed close to 340 people in Lebanon, shipping sources said Friday.

A source at Brostrom Tankers, based in Sweden, said Syria was, "fully
excluded from all discharge options," and would remain so as long as the
conflict continued.

Other shipping sources said most large owners were adopting a similar
stance. "No owners we know of are accepting a call at Syria," said an Italian
ship broker.

The rapid escalation of the conflict, which may now see a large scale
ground invasion of southern Lebanon by Israeli forces, only heightened fears.
Ships fixed to Syria Friday would arrive in around two weeks and owners are
concerned that the conflict may worsen, sources said.

As a result, charterers with cargoes for Syria were struggling to find
tankers. "Nothing has fixed to go there since the war started," said another
Geneva-based shipbroker. The broker said he was looking for tankers with
Syria options for three cargoes, "but there was no way I could get an owner to
go there. We just had to drop it."

Although owners were unwilling to commit contractually to go to Syria,
sources said an informal arrangement could be possible. "Perhaps there may be
someone with a cargo on board whose charterers want to go to Syria," said the
Italian broker. "It could happen once a vessel is a day or so off the Syrian
coast, once the owner checks with the insurers, shipowners association, and of
course master and crew."

The Geneva-based broker said some smaller owners could be persuaded to
go but at the right price. "You could get a large premium, but its not worth
exploding your vessel," he said.

Israel waged deadly strikes against Lebanon for the 10th day Friday and
mobilised more troops after warning it could launch a full-scale ground
invasion -- despite mounting international calls for a ceasefire, AFP
reported.

UN Secretary General Kofi Annan on Thursday demanded an immediate
ceasefire, highlighting the human suffering caused by the deadliest
cross-border fighting in a quarter century that has also killed 33 Israelis.

---James Herron, james_herron@platts.com

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