Piracy off Somalia seen denting Suez Canal traffic

By Yusri Mohamed

ISMAILIA, Egypt (Reuters) - Rampant piracy off Somalia's coast will hit revenues at Egypt's Suez Canal if piracy is not quickly curtailed and shippers continue to shun the strategic waterway, current and former canal officials said. One of the world's biggest shippers has said some of its fleet was avoiding the canal due to piracy fears south of the waterway linking the Red Sea to the Mediterranean, and a major tanker association said many others were also diverting vessels.

"A decline may happen as a result of piracy acts," one Suez Canal official said, asking not to be named because he was not authorised to speak to the press. "We are following the situation with sharp interest."

The move by some shippers to avoid the canal follows the spectacular capture by Somali pirates of a Saudi Arabian supertanker loaded with $100 million worth of oil a week ago, the biggest ship hijacking in history.

Denmark's A.P. Moller-Maersk is routing some of its 50 oil tankers around the Cape of Good Hope instead of through Suez, and Intertanko said many other tanker firms were doing the same.

Norway's Frontline, which ferries much of the Middle East's oil to world markets, said it was considering a similar step.

Millions of tonnes of crude oil, petroleum products, gas and dry commodities like grains, iron ore and coal, as well as containerised goods from electronic goods to toys are ferried through the Gulf of Aden and Suez Canal every month.

Revenues at the canal have already dropped from life highs in August, but officials attribute the slowdown to the global economic crisis and say piracy has not yet affected returns.

The canal made $467.5 million in October, down from $504.5 million in August when a record 1,993 ships used the canal.