The burning Greek-flagged oil tanker MV Sounion, which has been on fire since the end of August after an attack by Yemeni rebels in the Red Sea, has been taken under tow by salvage teams. Reuters
The burning Greek-flagged oil tanker MV Sounion, which has been on fire since the end of August after an attack by Yemeni rebels in the Red Sea, has been taken under tow by salvage teams. Reuters
The burning Greek-flagged oil tanker MV Sounion, which has been on fire since the end of August after an attack by Yemeni rebels in the Red Sea, has been taken under tow by salvage teams. Reuters
The burning Greek-flagged oil tanker MV Sounion, which has been on fire since the end of August after an attack by Yemeni rebels in the Red Sea, has been taken under tow by salvage teams. Reuters

New effort to tow Houthi-damaged oil tanker from Red Sea under way


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The latest operation to tow a burning Greek-flagged oil tanker attacked by Yemen's Houthi militants in the Red Sea has begun, the EU's naval mission said.

Fires have been burning on the MV Sounion since it was attacked on August 21 and environmentalists have said that any leak from the tanker – estimated to be carrying the equivalent of one million barrels of crude – could lead to the worst oil spill in history.

Greek state media have reported that a Greek tugboat was accompanied by three frigates, helicopters and a special forces unit to tow the ship away. The 25-member crew was previously rescued by a warship from the EU mission.

“Despite challenging conditions, with temperatures reaching up to 400°C due to the fire, the specialised salvage team successfully secured the tanker to the Aigaion Pelagos,” a supply ship, state media said.

Salvatore Mercogliano, an expert on military and commercial shipping at Campbell University, North Carolina, told The National salvage crews have been able to board Sounion, raise the anchor and attach a tow line to the large 10,000 horsepower salvage ship Aigaion Pelagos.

“The question now is, where will the vessel be towed – probably Saudi Arabia – and then they can begin firefighting and salvage efforts to stabilise the vessel,” Mr Mercogliano said.

“The risks are moving a stable vessel and placing it under tow. The movement of the vessel could cause a change in the fires that are burning, and worse case is the beginning of a major leak leading to a spill.”

The EU’s Operation Aspides had published images dated Saturday of its vessels escorting three ships heading to the stricken tanker, which was struck by Houthi missiles almost a month ago. Earlier attempts to tow the ship to safety were abandoned after the operation was deemed unsafe, the EU said at the time.

On Saturday, the EU mission said: “The salvage operation of the MV Sounion is essential in order to avert a potential environmental disaster in the region.”

The Pentagon in the US has previously said the vessel appeared to be leaking oil, a claim denied by the EU mission.

“If brought into a harbour, and most importantly out of the range of the Houthis, the salvage teams will be able to extinguish the fires and begin to stabilise the ship,” Mr Mercogliano said.

“They will surround the vessel with a containment boom. They will also be able to start pumping off fuel and repairing damage.”

Towing the ship is the first stage of the salvage operation, to be followed by the transfer of the vessel's oil cargo. Saudi Arabia will offer its assistance with that project, sources told Reuters.

The ship is one of at least 80 to be attacked by the Iran-backed Houthis in the Red Sea and Gulf of Aden since the Gaza war began. Several ships have sunk and crew members killed in the attacks.

The Houthis have caused major disruption to global trade and shipping with their assaults, which they say target vessels linked to Israel or heading to its ports. The group has vowed to continue until the war in Gaza ends and Israel's blockade on the enclave is lifted.

The rebels have attacked more than 80 vessels with missiles and drones since the war in Gaza began in October. They have seized one vessel and sunk two in their campaign, killing four sailors. Other missiles and drones have either been intercepted by a US-led coalition in the Red Sea or have failed to reach their targets.

“The aim of our attacks is clear: to pressure the Israeli enemy and the United States to stop the aggression on Gaza and lift the siege,” a source close to the Houthis told The National this month.

The Houthis have also launched missiles at Israel, killing one person in Tel Aviv in July. The EU has warned that more forces are needed in the Red Sea to counter the increasing Houthi attacks.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: September 16, 2024, 6:09 AM