The fall in crude oil prices have changed the tactics handled by pirates.
Pirates operating off the Nigerian coast can lead to a revenue loss of close to $7bn annually, with the bulk of costs affecting the oil industry. In Singapore, pirate groups can earn up to $1m for a successful tanker hijack. The falling oil prices have however caused these groups to rethink their hijacking tactics. This has therefore seen the replacement of the usual tanker hijack to the recent kidnappings for ransom on the Nigerian coasts and exposing anchored tankers in Singapore to greater hijack risks.
Piracy blooms in the Gulf of Guinea as there is no stringent rules or law enforcement. In these regions there is a very easy access to illegal markets and are considered as target rich environment. Between Jan 2012 and Feb 2016, 62 separate piracy attacks relating to oil and gas were recorded in Nigeria waters. This number has been falling from 22 in 2014, to 13 in 2015, to only two in 2016 so far. On the other hand, the number of hostage taking events in Nigerian waters has risen from 4 in 2014, to 13 in 2015 and 4 already in 2016. While it’s too early to say if this is a direct result of falling oil prices, there is a strong correlation.
A less considered impact from the falling oil price is the surge in tankers anchoring for long periods in pirate hotspots, as they act as temporary storage facilities until oil prices stabilise. While the bulk of these attacks were ‘snatch and grab’ incidents, static tankers are a tempting hijack target as they allow pirate groups the time to monitor security routines, select suitable boarding points and organise complex operations.
Source: City A.M.