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Pirates' Attacks May Boost Oil Prices

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The Associated Press

Published: November 19, 2008

CAIRO, Egypt - It seems inconceivable: Somali pirates in speedboats foil warships from the world's most powerful navies to prey on shipping lanes crucial to the oil supply.

How do they do it? Basically, it's a big ocean and no one wants to be top cop.

NATO and the U.S. Navy say they can't be everywhere, and American officials are urging ships to hire private security. Warships patrolling off Somalia have succeeded in stopping some pirate attacks. But military assaults to wrest back a ship are highly risky and, to this point, uncommon.

Governments, navies, oil companies and ship owners are scrambling for solutions, and finding few options are ideal. Shippers and insurance companies that once minimized piracy's risks have now awakened to the potential economic impact. The turmoil could force cargo ships and tankers to take longer routes around Africa, drive up costs and, though it hasn't happened yet, even raise oil prices.

"It's unbelievable to me that we can run AWACS aircraft that can tell you anything that is moving, but apparently we cannot spot small boats full of chaps with machine guns," said Giles Merritt, director of the Security & Defense Agenda, a think tank on security.

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