Container ship GFS Pride sinks in Strait of Hormuz as attacks on cargo vessels spread

A Singapore-flagged container ship, the GFS Pride, sank in the Strait of Hormuz after being hit on Tuesday 13 October. The Maritime and Port Authority of Singapore (MPA) said the ship "sustained damage and a fire on board, and has since sunk", and that all 21 crew were safely evacuated with no injuries, as reported by Reuters and gCaptain. Reuters described the GFS Pride as a small container vessel with a capacity of 2,824 TEU.

Reuters also reported that the dry bulk carrier Cape Dao, struck by a projectile on 23 September, sank close to the strait, according to International Maritime Organization data. Reuters said the two are the second and third vessels to sink since the US-Iran war began on 28 February.

gCaptain reported that a second Singapore-registered container ship, the GFS Giselle, was struck on 14 October (Singapore time) and reached a safe anchorage under its own power with all 22 crew safe. It also reported four further UKMTO attack warnings for 13 October, covering three container ships and one tanker.

Iran's Revolutionary Guard claimed the GFS Pride hit a naval mine. Investing.com reported that maritime security firm Marisks said there was no independent evidence of this. MARISKS said, as quoted by Reuters: "The threat is not confined to tankers, with container vessels and bulk carriers also sustaining serious damage."

Investing.com reported that more than 20 vessels, mostly oil tankers, have been attacked this month in Hormuz, the Persian Gulf and the Gulf of Oman, citing UKMTO incident reports. It cited Kpler data showing crude exports through Hormuz averaged 8.5 million barrels a day in the week to 12 October, nearly 40% below pre-war levels.

Oil and freight

Reuters reported on 15 October that the Trump administration is considering easing sanctions on so-called shadow fleet vessels to reduce record-high freight rates, allowing oil not sanctioned by Washington to move on previously sanctioned ships. No decision has been announced, and Reuters cited Energy Aspects as saying the step would not greatly affect freight rates.

The same Reuters report said the International Energy Agency (IEA) reported on 14 October that crude exports from Middle East Gulf producers rose by 4.4 million barrels a day in September to around 75% of pre-war levels.

Trading Economics showed Brent at US$104.34 a barrel on 15 October, down 1.62% on the day. Ship & Bunker showed Singapore VLSFO bunker fuel at US$917.00 a tonne on 14 October, up from US$867.50 on 2 October.

Investing.com said most of this month's attacks have been on oil tankers. A container ship sinking puts cargo owners directly in the picture: goods on a lost vessel may be a total loss, and a ship that is damaged but saved can lead the owner to declare general average, where cargo interests are asked to share the cost of saving the ship before cargo is released.

Higher risk in the strait can also mean higher war risk insurance premiums and surcharges for Gulf cargo, and more schedule changes for services calling at Gulf ports. Bunker costs are rising again, which feeds into carriers' fuel surcharges.

For Sri Lankan importers and exporters with Gulf business, the risk now extends to the container ships carrying their goods, not only to oil tankers. Our recent posts cover the tanker attacks off Sohar and the Aramco headquarters strike.

• Check with your forwarder or carrier whether any of your containers are booked on vessels transiting Hormuz, and ask for vessel names and planned routes.
• Review your marine cargo insurance to confirm it covers war risks and general average for Gulf shipments.
• Ask carriers in writing about any new war risk or emergency surcharges for Gulf ports and their effective dates.
• Allow for longer and less predictable transit times on Gulf-bound and Gulf-origin cargo.
• Keep buyers and suppliers in the Gulf informed about possible delays.