Tanker attack won’t affect Taiwan fuel supply over short term: CPC (2019/06/14)

  • 2019-06-15
  • Yinung Chen

Taiwan's state-run refiner CPC Corporation says it lost 750,000 tons of naphtha in a tanker attack in the Strait of Hormuz on Thursday. A chartered tanker was on its way to Taiwan when it was hit by a suspected torpedo in the shipping lane, where strikes have been increasingly frequent amid heightened tension in the Middle East. It was not immediately clear who was responsible for the attack. CPC says it still has a 75-day supply of naphtha, which is needed to produce high-octane gasoline. It also reassures the public that the lost cargo won't affect the domestic fuel supply over the short term. 

Two large oil tankers were attacked Thursday in the Middle East's Strait of Hormuz. One tanker had been carrying fuel product for Taiwan's CPC.

Voice of Nic Robertson
So it's an escalation in the style and the severity of the attack -- that huge fires have ensued aboard these vessels, that there was an injury this time.

The tanker had been rented out to CPC by a Norwegian firm. Following the attack, all 23 crew members were rescued and have safely arrived in Iran. But the tanker's cargo of 75,000 tons of naphtha was completely destroyed. The refiner said it didn't see the incident leading to a domestic fuel shortage.

Chiu Chia-shou
CPC Corporation
In stock, there is still enough for 75 days. Basically, every month we export about 200,000 metric tons of gasoline. If necessary, when the time comes, we will reduce our export volume, so basically there will be no effect in the domestic market.

The state-owned refiner said it had a supply of 450,000 kiloliters, enough for up to two months. It said that before July 20, it would need to arrange an emergency procurement. With tanker attacks increasingly frequent, future shipments are not without risk.

Chiu Chia-shou
CPC Corporation
As for insurance,
We have full insurance. As for this lot, the purchase price was about US$34 million.

One-fifth of the world's crude oil goes through the sea lane where the tankers were attacked, and where regional tensions have been steadily rising. As a consequence of yesterday's attack, the international oil price has jumped by more than 4%. Prices at the pump are likely to follow.