DN: Odfjell CEO on Strait of Hormuz situation

(Translated DN Article)

The Odfjell CEO on dramatic voyage: – They wanted to get out Odfjell sent one of its vessels through the Strait of Hormuz when few others dared.

“I think I checked the position 50 times before they had rounded the bend,” says CEO Harald Fotland.

Harald Fotland steps off the train at Oslo Central Station on Monday afternoon. It was no quiet weekend in Geilo. The cabin trip took a sudden turn when explosions were reported in Iran early Saturday morning.

“I was woken by a phone call around six or seven on Saturday morning, and it’s been nonstop ever since.”

He explains that Odfjell has been preparing for such a situation for a year and has held regular meetings to discuss various scenarios. So when it finally happened, he thought: Now it’s happening—what we’ve trained for.

Still, he was affected by the situation.

“I didn’t sleep very well Saturday night, I have to admit. But I was very relieved around midnight when the ship had rounded the bend. I fell asleep after a while,” says Fotland.

Dramatic situation

As remnants of Iranian missiles struck near several cities around the Persian Gulf, a group of ships set sail to get through the Strait of Hormuz while they still could.

One of them was the Norwegian Odfjell vessel Bow Summer.

Before making the decision, Odfjell assembled a large global team: logistics, operations, chartering and crewing. They spent Saturday trying to gain an overview of the situation.

“Did you personally experience it as dramatic, knowing you have crew in the area?”

“Yes, we experienced it as dramatic. Absolutely. And in a way it became more dramatic. The first reports were about unilateral attacks from the American and Israeli side. Then we saw an escalation when Iran began countermeasures on Saturday morning. It was a situation that we felt was escalating.”

Checked 50 times

Fotland believes their prior training and familiarity with discussing critical situations proved decisive.

“When the decision had to be made, we felt that the risk picture in the Strait of Hormuz itself was relatively stable. There was increased risk for ships associated with the U.S. and Israel, but at that time we believed there was no increased risk for othe r vessels. At the same time, we saw that the situation was deteriorating at the ports and in the area wherethe ship was located.”

He adds:

“We had an escalating situation. We were in dialogue with the ship — they wanted to get out. The decision was not an easy one, but that’s where we landed.”

“Did you feel it was a gamble to take at that moment?”

“I felt it was a gamble both to let the ship remain and to let it sail. But … I think I checked the position 50 times before they had rounded the bend and made it into the Gulf of Oman.”

“It will be chaos to clean up”

Even if the war turns out to be short, Fotland believes we have only seen the beginning of how it will affect supply lines.

“There will be a massive bottleneck when things reopen. Just look at the map at all the ships waiting outside to get in. They are all headed for their designated ports. Cleaning up this chaos will be a nightmare for weeks,” he says.

“The unique thing about the Strait of Hormuz is that you have to pass through it. In the Red Sea, there have also been periods of high risk, but there we have the route around Africa as an alternative. In Hormuz, there is no alternative,” says Fotland.

Fotland says the company will likely lose money now due to increased wait times. He is prepared for the situation to last for some time.

“I think we are so early in the war that the U.S. and Israel do not have shipping and Hormuz as their main focus right now. They may secure the waterway, but we will probably have to wait until it moves further down their priority list and they start think ing about maritime traffic,” says Fotland.

On the other hand, many believe freight rates may reach record highs going forward.“The unrest will push rates up. I can’t see it any other way. There has been talk of staggering figures like 350,000 dollars per day,” says Fotland.

Over 100 ships stranded

According to TradeWinds, DN’s sister publication, nine percent of the world’s largest oil tankers are now “trapped” in the Persian Gulf.

Oil Brokerage counted over the weekend that 56 of these supertankers were stuck west of Hormuz, in addition to more than 70 smaller tankers.

Some of the trapped vessels are Norwegian.

Odfjell has confirmed that it has four ships inside the Gulf, while Belships says it has one vessel there. The Norwegian Shipowners’ Association told DN Monday afternoon that around 30 Norwegian-affiliated ships are in the area, and that “a significant number” are inside the Gulf within Hormuz.

They are continuously assessing whether it is safest to remain or to sail out.

At least five ships attacked

On Monday afternoon, yet another ship in the Persian Gulf was attacked. The vessel Stena Imperative was hit by an Iranian missile, according to a statement from the Swedish shipping company.

TradeWinds reports that the ship has been used by the U.S. Navy, and that one fatality and two serious injuries have been reported following the attack.

Stena Bulk has been in service for the U.S. Navy. According to Stena’s statement, the vessel was struck at 14:00 local time on Monday.

Since the war broke out on Saturday, at least five ships have been attacked in the Persian Gulf.

“Never perfect information”

Ivar Hansson Myklebust is CEO of Belships, which has the vessel Belray anchored just north of Dubai, near the Strait of Hormuz.

“From a shipowner’s perspective, we have ensured that crew, vessel and cargo are safe. We are awaiting further instructions from our charterer and recommendations from insurers and authorities,” he says.

The charterer is the customer who has hired the ship for transport. He does not wish to comment on who the customer is or what the cargo consists of. Bulk carriers typically transport grain, coal, iron ore and cement.

“When do you think it can leave port?”

“We don’t know. It depends on the situation — we are monitoring it closely. Right now it is uncertain whether the strait is closed, so we just have to wait.”