Shipping insurance companies are rubbing their hands in glee.   Somalia’s Puntland pirates are growing more aggressive and costing shipping companies billions of dollars.   Well they’re not really. They’re merely making insurance premiums grow and here and there slowing the delivery of a pile of sugar or something.   And the shipping company just passes on the higher insurance premium costs to the consumer and everyone is happy.

Except the crew.   And people like Bruno Pelizzari with his partner Deborah who were captured by pirates in a tiny little yacht. Peter,  the skipper, escaped.

Urgent update : after this blog was written  armed pirates seized a US-bound oil tanker off Oman today (Wednesday 9th Feb) carrying around $200 million worth of crude  in one of the biggest raids in the area to date.

The 333-metre very large crude carrier, the Irene SL, was carrying about 2 million barrels of crude oil, estimated to be nearly 20% of daily US crude imports, a day after an Italian tanker was snatched by Somali pirates.

Another of Puntland's favourite sons doing what he does best

London’s insurance companies in particular,  who dominate shipping insurance.   Could it be that the nefarious oafs of the infamous colonial wharf are actually FUNDING the Pirates of Puntland?  Its been known to happen that top English brands like the Queen have – over the years – given their tacit approval to rampant piracy.

If I was a broker in Britain,  I would be sending Puntland loads of skiffs carrying Rocket Propelled grenade launchers, arms,  and satellite phones and even radar and GPS systems to assist them the pirates in their task of hammering shipping.   Helps me.  As an insurance broker.

After all,  the lovely pirates are kind of cute.   Except of you’re one of the few dozen who’ve died through starvation and destruction caused by these ignominious little trolls.

But seen from a hazy distance,  they’re lovable oafs.  Close up the reality is somewhat different of course,  but obscured by historical anachronism.

Where is the joy for South African ports?  Only when the Gulf of Oman becomes too expensive  - not too dangerous – will the shipping companies decide to go south.

And what of the chattel of shipping,  the crew?  They’re all expendable.  Most come from countries like the Ukraine, Philippines, Nicaragua.   No-one – particularly the shipping company itself – really gives a jot for these folks.   The ship is insured – who cares if Jose Emannuel Philippe Costa-Civares has life insurance.  That’s his problem.    So until the pirates really become very expensive to shipping,  the curse of Puntland will continue.   Just like the West Indies in 1650-1750 era.

Political will is lacking, and pirates are still cheap.

How many oil tankers are required to prove that we’re out of the recession?   A strange question perhaps.  As we’re repeatedly told,  the price and demand in the oil industry is a touchstone determining how fast traders think the world is going to grow.   When it comes to oil,  the one true reflection of growth is the demand for oil tankers.

Right now, its pretty bad.  It’s so bad,  that many are breaking even at oil trading below $80 a barrel.   It costs around $10 000 a day to run an oil tanker,  and a lot more than this to pay back the loan when you build one.

Oil and the sea - a recession tester

By June last year,  the prognosis was terrible.   Frontline Limited,  generally known as the biggest operator of SuperTankers on earth,  cancelled orders for two supertankers and four supermaxes worth  $556 million.

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