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Oil supertanker grounded in Indonesia will take a month to free

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Louise Jardin
Louise Jardin
Louise Jardin has been in Asia for twelve years and written for a series of journals and newspapers including the Japan Times in Tokyo, CFO Asia and a number of financial journals across Asia. She now lives in Hong Kong. Disclosure: I have no direct investment holding in any stocks or bonds in Indonesia , and no plans to initiate any positions within the next 96 hours. The opinion expressed in this article is my own. I have no commercial relationship with any company cited on this website nor am I receiving any compensation from anyone except from Alpha Southeast Asia, controlling shareholder of www.www.whatinvestorswant.com

Indonesian authorities said on Monday (Nov 7) it could take up to a month to free a crude oil tanker stuck in its waters, while the United States slapped sanctions on the vessel for alleged links to Hezbollah and a branch of Iran’s Revolutionary Guards.

The Indonesian navy has been trying to free the Djibouti-registered vessel, Young Yong, which ran aground off Indonesia’s Riau Islands on Oct 26.

The US last week issued sanctions against an international oil smuggling network it said supports Hezbollah and Iran’s Quds Force, targeting dozens of people, companies and tankers as Washington sought to mount pressure on Tehran. The Young Yong was among the vessels sanctioned.

US embassy officials in Singapore and Jakarta did not immediately respond to requests for comment.

Capable of carrying 2 million barrels of crude oil, the stranded tanker is almost full, according to shipping data on Refinitiv Eikon.

Rear Admiral Arsyad Abdullah of the Indonesian navy said an operation was underway to free the ship.

“We need to be careful with the process because there are (natural gas) pipes, so it may take about a month,” he told Reuters on Monday.

The ship ran aground in the Singapore Strait near a key pipeline that supplies natural gas to Singapore. No injuries or leaks have been reported. It typically loads crude oil bound for China from floating storage at the Singapore-Malaysia Straits.

The ship is owned by Technology Bright International and managed by East Wind Ship Management. The companies could not be reached for comment.

In a statement last Thursday, Singapore’s Energy Market Authority (EMA) said the grounded vessel was in the vicinity of subsea pipelines that convey natural gas from South Sumatra and West Natuna in Indonesia to Singapore for power generation and industrial use.

β€œThese pipelines are rock-armoured for additional protection. Thus far, gas supply and pressure from these pipelines remain normal.”

The agency added it was closely monitoring the situation and prepared to activate the necessary contingency plans to minimise disruptions to electric supply in Singapore.

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