Japan's MOL issues 'safety alert' for Persian Gulf shipping after Israel's attack on Iran

Japan's Mitsui O.S.K. Lines, one of the world's largest ship operators, has issued "safety alerts" for its ships sailing in the Persian Gulf following Israel's attacks on Iran, an MOL spokesperson told Platts, part of S&P Global Commodity Insights, on June 13.

"We have issued safety alerts for our ships sailing in the Persian Gulf, following Israel's attack on Iran earlier in the day," the MOL spokesperson said.

Crude oil futures rallied in midmorning trading in Asia on June 13 as the focus turned to energy infrastructure after Israel launched preemptive airstrikes across Iran.

At 11:07 am Singapore time (0307 GMT), the ICE August Brent futures contract rose $6.75/b (9.73%) from the previous close to $76.11/b. The August-September spread widened $1.24/b to $2.16/b, while the NYMEX July light sweet crude contract was up $7.07/b (10.39%) from the previous close at $75.11/b.

The Strait of Hormuz connects the Persian Gulf to the Arabian Sea, through which some 20 million b/d of seaborne crude, condensate and refined fuels transit, along with nearly 11 Bcf/d of LNG.

There are fears of supply disruption as Iran is expected to retaliate, said a tanker broker in Seoul who mediates deals for chartering ships loading crude in Saudi Arabia.

Crude will continue to move across the Persian Gulf, but the delivered cost will rise due to expensive cargo, transportation and insurance, a chartering source in Tokyo said.

In other developments, the US already plans to partially evacuate its embassy in Iraq. Any escalation in the conflict would reverse the recent weakness in freight and provide fresh support, shipping market sources told Platts overnight on June 12.

Clean tanker freight has been declining over the past week due to ample supply, while dirty tankers are under significant downward pressure and are "cleaning up." However, with Israel's attack on Iran, the trend may reverse, a tanker broker said June 13.

The Persian Gulf, along with the West Coast of India, is the world's largest exporter of naphtha by volume, shipping out a combined total of nearly 50 million mt to East Asia, according to shipping industry estimates.

Japan and South Korea are among the largest importers of naphtha from the Persian Gulf. Japan heavily relies on the region for its crude supply, sourcing more than 90% of its requirements from the Persian Gulf.