Monday, 8 August, 2022
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Global economy in peril as rusted oil tanker threatens to blow off Yemen’s west coast

Yemen, Saudi Arabia, Jordan, others endangered as 1.1 million barrels crude oil threatens to spill into the Red Sea.

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Most of the limited international diplomatic energy devoted to ending the civil war in Yemen understandably goes to preventing the loss of lives, whether from bloodshed or famine. But now that a two-month truce between the belligerents has been extended, urgent action is required to forestall a different kind of calamity: an oil spill that could rank as one of the world’s worst environmental disasters and disrupt a vital global trade route.

The civil war has both created and, for several years now, distracted attention from the fate of the FSO Safer, a decrepit oil supertanker, laden with 1.1 million barrels crude oil, which has been rusting in anchorage off the port of Ras Isa in Yemen’s west coast.

The Houthis, an Iran-backed rebel group that started the war in 2014, made some desultory efforts to sell the oil, but buyers were deterred by the war and international sanctions. The rebels then allowed the tanker to decay, using the prospect of a disastrous leak to blackmail the international community for aid and favorable terms in ceasefire negotiations.

Now the Houthis have belatedly agreed to allow the oil to be offloaded from the vessel, but the United Nations and environmental groups like Greenpeace warn that time and money are short — and that the Safer is a time bomb about to blow, spilling its toxic cargo into the Red Sea.

This threatens not only the eight littoral countries — Yemen, Saudi Arabia, Jordan, Israel, Egypt, Sudan, Eritrea and Djibouti — but also international shipping on one of the world’s busiest trade routes. The risk to the global economy needs no exaggeration: Memories are fresh from the last time a single ship choked the waterway.

But the damage caused by the Safer would be far greater than the economic costs imposed by the Ever Given in March 2021. The UN reckons it would take $20 billion just to clean up the Red Sea; the toll on the global economy could be magnitudes higher.

Built in 1976, the single-hulled Safer is 360 meters long — a fifth again as long as Exxon Valdez, the ship at the center of the infamous 1989 spill in Alaska’s Prince William Sound. Previously called Esso Japan, it was converted into a floating oil storage and offloading facility and sold to the Yemeni government in 1988. Its name (pronounced “saffar”) comes from the desert location of the country’s first oil discovery.

The vessel was last surveyed eight years ago by the American Bureau of Shipping before the civil war prevented any further audit of its seaworthiness. Its hull desperately needs repair, and it is a safe bet that its mechanical and electronic equipment — including, crucially, its fire-fighting gear — are no longer in working order. A spill from a breached hull or an explosion are both clear and present dangers.

The UN reckons an emergency operation to offload the oil will cost $80 million. (An additional $64 million will eventually be required for a replacement for the ship.) Donors have been parsimonious, however, and the UN is short by $20 million for the offloading operation. It is resorting to online crowd-funding to plug the gap.

Time may be a scarcer commodity. It is hard enough to predict when the Safer might break or blow, and no less difficult to handicap the Houthis’ interest in maintaining the peace. They have previously used cessations of hostility merely to replenish their arms supplies. Despite the extension of the current truce, the rebels have not shown much interest in a lasting agreement with the Yemeni government in exile and the coalition of Arab nations that support it.

Geopolitical factors add to the uncertainty. The truce would not have lasted this long if it didn’t suit Iran to restrain the rebels while it negotiated for a revival of the 2015 nuclear deal with the world powers. But with prospects of a revival fading, the regime might again unleash the Houthis against their mutual enemies, Saudi Arabia and the United Arab Emirates.

The resumption of Houthi missile attacks against Saudi and Emirati oil installations would end the truce as well as any hopes of saving the Safer — and the Red Sea. But, with its own shipping limited by economic sanctions, Tehran might well regard the prospect of an environmental disaster in international waters as somebody else’s problem.

The only way around this is for the international community to back the UN with the cash and diplomatic capital needed to carry out the emergency offloading of the tanker even as it presses the Houthis for a longer truce. The Saudis and Emiratis, who stand to lose from the resumption of hostilities and any impediment to shipping in the Red Sea, should bear larger shares of the bill.

The last thing the global economy needs right now is an environmental calamity on one of its most important shipping lanes.- Bloomberg


Also read: Yemen’s ragtag rebels became a threat to world economy, showed military power has its limits


 

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