Israel-Hamas war and rocket attacks are leading oil tankers to make unusual moves near ports

Oil tankers are going dark in waters off Israel amid rocket attacks near ports as the shipping industry takes rare safety precautions.

Israel-Hamas war and rocket attacks are leading oil tankers to make unusual moves near ports

Important Points

According to global logistics intelligence firms, Israel has taken a number of steps in order to avoid an energy crisis by ensuring the flow of oil through its ports and pipelines.

Oil tankers in Red Sea take unusual actions during the Israel-Hamas War. They shut off their global tracking systems, called Automatic Identification Systems(AIS), in order to avoid detection.

Homayoun Falikshahi is a senior oil analyst with global trade intelligence company Kpler. We don't even see any crude-carrying tanks doing this at the moment.

As shipping lines are advised to wait offshore after rocket attacks were reported in the Israeli ports of Ashdod, and Eilat.

Ambrey, a global maritime risk management company, wrote to its clients in a Saturday note after a series rocket sirens were heard at the Port Ashdod. In the event of sirens, crew members should seek shelter.

A section of a vessel with armor or protective gear can be considered ballistic protection.

Falakshahi told CNBC that vessels not only turn off their tracking system while on the move, but also when they are unloading their crude or cargo.

Data shows that Sea Galaxy, a tanker with its AIS off on October 24, discharged in the Port of Haifa. Falakshahi stated that this behavior is unusual and delays information about a discharge.

Israeli authorities have informed the international shipping community that any damages caused by war in the economic waters of the country will be compensated. Some ocean carriers are adding surcharges to cargo heading to Israel due the war risk. No reports of oil tanker attacks have been reported to date.

Israel closed Ashkelon's Port, its largest oil-importing port due to rocket attacks. The war has caused the activity in the Port of Ashdod to drop dramatically. However, the Port of Haifa, located further north, remains stable.

Ashdod Port is the main hub for exporting potash and bromine from Israel. Potash is an important component of fertilizer. Bromine is used as a raw materials in textiles and pharmaceuticals, oil, gas, food, beverage, electronics, construction and energy production. ICL Group is a major Israeli manufacturing company which produces metals, chemicals, and fertilizers for agriculture, food, and materials sectors. It provides about a third the global bromine supply.

According to CNBC Supply Chain Data provider Everstream Analytics the Port of Ashdod is a key transport hub for ICL Group. ICL said that the export of certain chemical goods would be delayed, even if local producers continue to operate in the next few weeks.

Mirko Wóitzik is the global director of Everstream. He said that rockets are fired regularly at the Port of Ashdod, in southern Israel. It's the second largest port of the country. He added that operations at Ashdod had also slowed due to a staffing shortage, with 10% recruited into the Army.

According to Everstream, the number of vessels waiting in the Port of Ashdod has decreased from 15 to less than five on a daily average since the beginning of the war.

Woitzik stated that "this suggests container lines are avoiding Ashdod and relying on the Port Haifa rather than Ashdod."

Evergreen was first to declare force majeure and divert a vessel bound towards the Port of Ashdod, citing "a persistent unsafe situation". It is important to make this declaration, as if other vessels declared force majeure it could affect Israel's food supplies. Ashdod, Haifa and other ports are important ports for food imports. Imports of food and agricultural products are almost three times higher than exports. Imports include live animals, sugar, vegetable oil, grain and feed.

Haifa is likely to see an increase in the number of ships, as many more are expected to divert their traffic to the port.

Tankers are now docking at alternate ports due to recent rocket attacks. The Seaviolet referred to the Port of Eilat last week instead of Ashkelon, its original destination. Kpler told CNBC that its analysis suggested Israelis had reversed the Eilat to Ashkelon pipeline flow to allow oil to reach Ashkelon and then the Ashdod or Haifa refineries which are connected to Ashkelon by pipelines.

Falakshahi said that because Eilat is located on the Red Sea near Gaza, ships can circumvent this conflict-ridden area by passing through the Suez Canal, and entering the Gulf of Aqaba.

Israel's crude stock levels are currently enough to cover about 50 days worth of domestic demand.

Israel imports roughly 10-13 crude oil cargoes per month.

Ambrey sent a note to its clients last week stating that a long-range missile was fired at Eilat, which penetrated the Iron Dome. The attack, it stated, "indicates an increase in Hamas operational activity. Not only are they targeting cities and ports in mass, but also launching rockets specifically to faraway targets as the third week of the war approaches."

Recent oil prices have fallen, despite tensions between Israel and Gaza. This has led to fears of a global oil supply disruption.

Andy Lipow, President of Lipow Oil Associates said that Israel relies on crude oil imports for its refineries. He is watching the Ports Haifa, Ashdod. He said that if they were to close, it would be important to keep an eye on the Port of Eilat.

Lipow added that other crude oil export terminals will be closely watched in the region, including those that load tankers that transit through the Strait of Hormuz. These include Ras Tanura, in Saudi Arabia, Basra, in Iraq, as well as Mina al-Ahmadi, in Kuwait.

Lipow also monitors the Port of Fujairah which is outside the Strait of Hormuz and is one of the most important locations for ship bunkering in the Middle East.