(EnergyAsia, March 4 2011, Friday) — Singapore’s shipping sector is confident of weathering the negative impact of oil at US$100 a barrel brought on by political unrest spreading across the Middle East, said a panel of industry executives this week.
Singapore is naturally hedged, said Maritime and Port Authority of Singapore chief executive Lam Li Young, as its sizeable offshore and marine sector is likely to benefit from rising oil prices to offset any possible downturn in the container trade.
“Our rig builders and shipyards will get more orders when oil prices rise as there will be increased offshore drilling and production activities around the world. This will offset any declines we may see in the merchandise trade which may suffer as fuel prices become more expensive,” he said at a press briefing to promote the Sea Asia 2011 event in Singapore on April 12 to 14.
Eng Aik Meng, President of container services provider APL, said oil at US$100 a barrel is unlikely to derail Asia’s economic growth as the region, led by China, is sufficiently robust to absorb the increase in fuel costs.
He believes Asia’s economies and its shipping sector will only start to feel the impact when oil rises to US$150 a barrel.
“At that point, everyone, not just the shipping industry, will be affected,” he said.
For now, the revolt is confined largely to the Middle East and North Africa, with few signs that it will spread to other countries. There is little to indicate that the Suez Canal, the most important passageway linking Asia and Europe, will be closed as the Egyptian people have already over thrown their long-time leader Hosni Mubarak with relatively little bloodshed.
As the Middle East is largely an “import” region, Mr Eng said its unstable political situation has had little impact on international trade and shipping so far. The exception, of course, would be oil as the region is the most important oil and gas supplier to the world.
Mr Eng said Asia’s rapid economic growth led by China will contribute significantly to the world’s container shipping markets.
“Economic activity in China has rebounded to levels not seen since the Lehman Brothers collapse which led to the global recession. The strength of China’s economy and the robust growth of the economies in Southeast Asia will open up exciting new markets for container shipping operators.”
The press conference was hosted by Seatrade and the Singapore Maritime Foundation (SMF), co-organisers of Sea Asia 2011 which will be held at the Marina Bay Sands resort.
The event’s theme, “The Asian Voice in World Shipping”, will be projected at the conference sessions led by top executives of leading international companies from Asia, Europe and other regions.
Mr Eng will be one of the speakers at the ‘Container Shipping and Logistics’ session which will be chaired by S.S. Teo, managing director of PIL and President of the Singapore Shipping Association.
The other industry leaders include Yudhishthir Khatau of Varun Shipping, also President Designate of the Baltic & International Maritime Council (BIMCO); Harald Serck-Hanssen of DnB NOR ASA; Philip Clausius of FSL Trust Management; Akira Akiyama of ABS; Remi Eriksen of DNV; Roger Roue of the Society of International Gas Tanker and Terminal Operators’ (SIGTTO); Andreas Sohmen-Pao of BW Group, and C.H. Tong of Keppel Offshore & Marine.
“Sea Asia is recognised not only as a platform for the exchange of knowledge and opinion, but as a recovery tool for sales and marketing teams seeking to expand customer bases. Its value is underscored by the strong support we have from the international shipping industry,” said Chris Hayman, chairman of Seatrade.
Deputy Prime Minister and Minister for Defence Mr Teo Chee Hean will officially open Sea Asia 2011 and tour the exhibition, which is expected to attract more than 12,000 maritime professionals and decision-makers.