As of April 27, 2020, around 60 clean fuel tankers are currently anchored along the strait, whereas under normal circumstances, only 30-40 ships anchor at Singapore’s coastline. As the demand for oil has plummeted, due to the ongoing COVID-19 pandemic, vessels are being used to hoard fuel at sea, while onshore tanks fill up. Reportedly, vessels are also anchoring as they wait to be redirected to any willing buyer. While discharging cargoes in Singapore typically takes 4-5 days, vessels currently have to wait about two weeks, leaving them stranded in local waters. Shippers are slow steaming, which deliberately reduces the speed of tankers to increase transit time. This strategy allows vessels to save on fuel while awaiting the emergence of interest from any potential purchaser.

Analyst Comment:

Considering that waters along the Singapore Strait already are a hot-spot for piracy and armed robbery, with at least six piracy incidents so far 2020, Pinkerton assesses that anchoring and slow steaming will likely create an even greater opportunity for maritime crime in the short term. Delayed discharging leads to port “bottlenecks,” which in turn slow traffic in nearby waters. While slow steaming, vessels are more likely to be reached and boarded by pirate speed boats along the strait. According to the Commercial Crime Services (ICC), all of the recent incidents in the Singapore Strait and the Malacca Strait during 2020 implied “boarding” tactics. Pinkerton assesses that neighboring waters, particularly in the Malacca Strait, likely will also report a higher incidence of piracy in the short to the medium term, as Malaysia’s and Indonesia’s maritime crime mitigating capacity will likely reduce amid the pandemic.

According to the ICC, the most recent piracy incident took place on March 15, 2020, in front of Karimunbesar Island, when a bulk carrier was boarded by armed robbers; three suspects were arrested by Indonesian authorities. Even though the full-range of impacts stemming from this issue is expected to develop in the coming months, Pinkerton notes that a higher incidence of maritime piracy typically increases shipping costs, along with insurance rates, security, and operating costs. Pinkerton recommends its clients monitor Singapore’s port traffic, oil and storage demand, and the deployment of Malaysian, Indonesian, and Singaporean security forces to respond to the pandemic, as it would likely undermine their operations to deter maritime crime.