RIGA - The European Commission last week placed a ban on all single-hull oil tankers, a move directed at protecting the union's waters and seashores from increasing ecological risks but will have a negative short-term impact for Baltic shippers and ports.
Beginning Oct. 22 all single-hull tankers carrying heavy crude and fuel oil will be forbidden to enter EU ports. In addition, beginning in 2005 all such tankers older than 23 years belonging to EU countries will have to be scrapped altogether.
Finally, in 2010 all single-hull tankers, including those that carry lighter oil products, will be banned from EU ports.
The decision follows months of intensive lobbying by France and Spain, whose coastlines have suffered millions of euros of damage due to the wrecks of the Prestige in 2002 and the Erika in 1999.
Analysts have estimated that the commission's decision will amount to $4 billion in losses for the oil transportation business worldwide.
For the Baltics, whose governments supported the decision, the ban will affect nearly all its ports. Industry observers said the ban could take business away from Baltic oil terminals and lead to gridlock at Russian ports. It could also push shipping fees up by as much as 40 percent, costing exporters hundreds of millions of dollars.
"The new rules will block both loading and discharging. It will be a big problem for us to transport products out of the Baltic Sea," said Andrei Chirikov, director of Sibneft Oil Trade.
Some 25 million tons of Russian oil have been shipped out of Baltic Sea ports this year. Traders and shipping brokers said the majority of these shipments were carried by single-hull tankers, which are older and cheaper.
In the short-term oil traders will have problems adjusting to the new rules and finding new vessels, especially considering that about 40 percent of all tankers used in the world are single-hull.
"The availability of tankers is going to be restricted. If the ban is implemented right away it will block terminals and refineries," Chirikov said.
Russian traders currently pay about $11 per ton for short-haul trips from the Baltic through the waters of northern Europe to Rotterdam. For longer trips, such as from St. Petersburg to Singapore, the cost is $27.50 per ton.
Of the 608 tankers that called in the Port of Tallinn this year, 156 were single-hull, according to the daily Aripaev. Around 85 percent of the tankers that leave the port head for a European one.
Single-hull – or "single-skin" – tankers are more frequent visitors in the Port of Muuga, and analysts say that this port was more likely to be affected by the commission's ban.
In Latvia the main loser will be Latvijas Kugnieciba, or LASCO, which owns 16 single-hull tankers. Eight new tankers partly meet the EU's new requirements, and four will be modernized this year and four next, said a company spokesperson.
The company will still be able to use its single-hull tankers as long as they carry lighter refined oil products.
Generally, however, Baltic ports and shippers were aware that the commission was going to impose the ban and have had months to prepare for the eventuality.
Bizess & Baltija reported that, according to the Helcom's commission for the protection of the Baltic Sea, 63 emergency instances involving vessels on the Baltic were recorded, out of which 12 occurred with tankers. In 11 out of 12 instances the vessel went aground, though luckily no leakage was recorded. (BBN, BNS)
