In a new Law360 article, Haynes Boone UK General Counsel William Cecil shares his insights on the challenges facing companies transporting oil and gas from the Middle East to global markets, highlighting the contractual and operational turmoil confronting charterers and vessel owners stranded outside the Persian Gulf due to the Iran war.
Read an excerpt below.
William Cecil, who heads Haynes Boone's dispute resolution team in London and frequently works on oil and gas shipping matters, said charterers and vessel owners, especially ones that are stuck outside the Persian Gulf, may have to examine whether their contracts allow them to temporarily take on other business, or even terminate their existing cargo deliveries.
"They'll have booked, or pre-booked ... their next voyage, so all of that will be disrupted," Cecil said. "The reality is, all charter contracts have a period of time, because obviously, these [vessels] are sailing around the world."
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But even making war risk insurance financially feasible may not be enough to convince vessel owners to risk traveling through the strait. After all, they're in the shipping business, not the business of collecting insurance payouts if their ships are damaged or destroyed, Cecil said.
"You're still out a ship," Cecil said. "You don't just go to the local showroom and buy one, either. If you have a build a new ship, that could take a couple of years."
Read the full article on Law360 here.
