Lucky Somali Pirates' Haul Was $120 Million Richer Than They Thought
At today's market rate of around $70 per barrel, that would mean the 1,085-foot supertanker is carrying $140 million worth of oil, said John van Schaik, the New York bureau chief for the Energy Intelligence Group, a leading industry authority. Previously, the Associated Press had reported that the ship was only carrying $20 million worth of oil. The correct number indicates that the pirates have a much more valuable cargo on their hands.
After the ship was hijacked off the coast of Somalia, Stavros Hadzigrigoris of Maran Tankers told the Associated Press that the ship is carrying around 275,000 metric tons of oil. "At current market rates the oil would be worth just more than $20 million," the wire service reported.
"That doesn't make sense," said van Schaik. "A metric ton has about 7.35 barrels. 275,000 DWT [dead weight tonnage] means 2.02 million barrels capacity. The tanker thus carries close to 2 million barrels. One barrel is worth around $70."
$140 million, not $20 million
Reached in Greece, a representative for the Maran Tankers confirmed to DailyFinance that the ship is carrying 2 million barrels of oil. Asked what that amount of oil is worth in dollars, the representative, who declined to identify himself, said, "I don't know. I'm not a trader. I just transport the oil."
Van Schaik says 2 million barrels is worth about $140 million at today's prices.
In recent weeks, Somali pirates have stepped up their attacks on shipping in the Gulf of Aden and beyond. They prowl the waters off the lawless East African state under the direction of competing warlords. On Monday, a maritime official said that pirates had seized another ship, an Indian dhow, off the coast of Somalia.
Of 324 maritime acts of piracy worldwide, "attacks by Somali pirates in the Gulf of Aden and the east coast of Somalia numbered 174 [so far this year], with 35 vessels hijacked and 587 crew taken hostage," according to ICC International Maritime Bureau's Piracy Reporting Centre data cited by Reuters. "Nearly 20,000 ships pass through the Gulf of Aden each year, heading to and from the Suez Canal," the wire notes.
The Maran Centaurus was traveling outside of the recommended E.U. naval corridor on its voyage to New Orleans from Jidda, Saudi Arabia, according to European naval officials.
Possible Source of the Error: Metric Tons vs. Barrels
One possible explanation for the discrepancy: The AP may have confused dead weight tonnage with barrels. In other words, it's possible that the wire misconstrued 275,000 metric tons of oil -- the dead weight tonnage -- as equal to 275,000 barrels of oil. If the ship were in fact carrying 275,000 barrels, at the market values current in late November, the wire service's figure of around $20 million would be accurate. But a metric ton of oil is equivalent to about 7.35 barrels.
Once the AP number entered circulation, it was accepted and repeated by other news organizations. And for obvious reasons, the ship's owners wouldn't be interested in publicly correcting the record.
But it wouldn't make sense that an oil tanker would travel all the way from Saudi Arabia to New Orleans less than 20 percent full. And in fact, it wasn't. It was nearly full. Which means that the Somali pirates who have captured it hold a much more valuable booty than previously thought.