Japanese shipping group halts oil calls to beleaguered Iraqi terminal

Eric Watkins, Middle East Correspondent

A leading Japanese shipping group has reported it will no longer send oil tankers to Iraq's Basra oil terminal (BOT) following suicide attacks that killed three US sailors and interrupted oil exports last month (OGJ Online, Apr. 24, 2004).

The announcement by NYK Line, which coincided with further attacks around Iraqi oil facilities during May 8-9, followed widespread concerns raised recently in Japan over security of shipping to the Arab country and came also as US forces struggled to improve security in the war-torn country (OGJ Online, May 6, 2003).

"At the moment NYK does not regard [BOT] as safe,"said Masanobu Hamakawa, spokesman for the Tokyo-based firm. "When we regard it as safe port, we might resume calling," Hamakawa told OGJ, adding that it is not clear at the moment when the group will resume calls at the beleaguered terminal.

NYK's announcement came May 8 as Iraqi militants launched more attacks, setting off a bomb that damaged a 15 m section of one of two pipelines that extend from Basra to the Faw Peninsula on the Persian Gulf.

BOT can load about 1.6 million b/d, while the nearby Khor al-Amaya terminal—which reportedly has been idle since last month's attacks—can handle as much as 700,000 b/d.

Warnings issued

NYK's announcement followed warnings issued earlier this month by Japanese maritime organizations concerned at the growing threat to their shipping in Iraqi waters.

NYK Chairman Takao Kusakari, who also serves as head of the Japan Ship- owners' Association (JSA), warned that Japanese oil tankers are likely to be high on the list of potential terrorist targets and advised tanker owners to be more vigilant.

Since the attacks on the Iraqi oil terminals, Kusakari has set up a hotline to the Japanese Ministry of Land and Infrastructure for alerts on changes in the security level.

A warning also came from the All Japan Seamen's Union (JSU), which has long opposed military action in the gulf. JSU likewise urged shipowners to avoid trade with Iraq, alleging that NYK's 280,000 dwt Takasuzu tanker, which was loading at Basra at the time of the suicide attacks, narrowly missed being damaged or destroyed.

The two warnings could trigger a complete halt to loadings of Iraqi oil by Japanese firms in order to protect their shipping as well as the nation's oil imports from other countries in the region.

Japan's Iraqi imports

According to figures from its Ministry of Energy, Trade, and Industry (METI), Japan began importing Iraqi crude last December, with an initial purchase of 4.03 million bbl. That climbed to 4.86 million bbl in January, but dropped to 4.52 million bbl in February and fell again in March to 3.6 million bbl.

Despite the downturn in Iraqi liftings for March, however, METI said Japan's reliance on Middle Eastern crudes was 92.3% for the month, up 2.7 percentage points on the year. The METI report also noted that "Japan will remain heavily reliant on oil from the Middle East, especially the gulf, given the region's vast crude deposits and Japan's limited resources."

Japanese liftings from Saudi Arabia alone indicate just how heavy that dependence is. In January, Japan's crude imports from Saudi Arabia totaled 31.76 million bbl—nearly seven times more than its liftings from Iraq for the same month.

Such figures clearly underpin the thinking behind NYK's decision to forego trade at BOT for the foreseeable future, especially given long-held Japanese concerns about terrorist attacks on their ships taken in retaliation for Tokyo's support of US policy in the region.

"Shipping plays a vital role in the supply of oil to Japan. We must take every action to ensure that Japanese shipping companies are not directly or indirectly affected by terrorist actions," NYK's Kusakari said in his statement to JSA members.

Spread of terrorism feared

JSU sounded that theme in a January 2003 statement against a war on Iraq, saying it would change Middle Eastern waters into a battlefield and prevent seamen from working safely. The union also said that "once war starts, Japanese ships in any waters could be exposed to attacks due to Japan's support of US war policy."

Masashi Seki, an executive at Mitsui OSK Lines Ltd., underlined those concerns at the time, saying his fear was that "terrorist activities will spread from the Persian Gulf to the Strait of Malacca, the Philippines, and Indonesia."

Tokyo has been a determined supporter of US policy in Iraq, underlined May 9 by the arrival of a 140 member Ground Self-Defense Force contingent as the first batch of Japanese troops to replace some 530 GSDF members now deployed in the southern Iraqi town of Samawha.

Japan also announced last month that it would extend the deployment of three of its Maritime Self-Defense Force ships until Nov. 1 in support of US-led antiterrorism operations in the Persion Gulf.

But Japan's actions also have angered insurgents in Iraq who took five Japanese nationals hostage in April and threatened to kill them unless the Asian nation ended its support for US policy. The hostages were released unharmed after the UAE interceded on Japan's behalf.