ISPS Requirements Could Disrupt OPEC Oil Exports

ISPS takes place on July 1, 2004, and many OPEC nations are not ready to meet the international requirements, which could disrupt oil exports. The U.S. Coast Guard has said that all merchant ships, including oil tankers and gas carriers, which are not in compliance with ISPS will be turned away.

Countries like Saudi Arabia, Nigeria, Kuwait, and Indonesia are nowhere near being ready for ISPS compliance. Furthermore, with crude prices already over $37 per barrel on world markets, and OPEC ready to implement a new round of production cuts in April, the United States, the world?s largest consumer, could have some serious oil supply problems this summer.

Saudi Arabia, the world?s largest oil exporter, has trained its security state-owned tanker fleet security officers, but it has not addressed port security compliance.

Kuwait and United Arab Emirates have discussed port security with consultants, but have done little else. Nigeria, whose high-quality crude is essential to U.S. gasoline refiners, is so far behind that it will be impossible to make the July 1st deadline. And, Indonesia has done absolutely nothing to be in compliance by the deadline.

Other OPEC nations, like Iran, Algeria, Iraq, and Venezuela have put little effort into compliance, while non-OPEC nations like Mexico are unlikely to meet the ISPS deadline.

USCG says it's adamant that ships coming to the USA from non-compliant countries will be turned away. This could leave the U.S. in big petroleum trouble.