Somali Pirates Net Big Oil
For those who have been following Somalia, the recent ship-jacking of a Saudi supertanker with about two million barrels of oil is not a surprise at all. The Somali pirates have increasingly bolder in the past two years of marauding.
The latest attack is more than 450 nautical miles off shore, signaling an even greater boldness. The presence of international navies in the area-including the Americans-has had little success in stopping the pirates. Now, they are traveling beyond the navies' reach into the waters south of Kenya.
But why be a pirate in the first place besides the obvious plunder? Well, frankly, being a Somali pirate is a pretty easy job to have.
The ships are "sitting ducks;" meaning they are easy targets and generally unaware of the threats around them.
Some of the biggest reasons why oil tankers and other transport ships make easy targets for pirates is the tankers generally travel with a small crew. The big ships are not agile enough to evade the pirates. And most countries will pay large sums of money to save the kidnapped crews.
The Financial Times reports the pirates generally do not care what's on board the ship, only what they can get as ransom for the crew. They've even taken over World Food Program ships!
But this time, I think the pirates are pressing their luck.
Even though $100 million is pocket change to the Saudis, I don't think they will be able to just let this latest pirate attack go. If the pirates are bold enough to go after a brand new supertanker THREE TIMES the size of an American aircraft carrier, what will they go after next?
The pirates may have just awakened a sleeping giant. The Saudis have enough resources to fund an all out offensive against the marauders and blow them out of the water.
But it may take a few more navies joining the Americans, Russians and British to flood the area and shut these pirates down once and for all.
In September, the European Union already approved plans for a possible naval mission to the Horn of Africa. My suggestion.fast track the plans. The last thing a growing global financial crisis needs is an upset in the flow of oil.