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Iraq Attack Frays Nerves Among Gulf Shippers With PM-Gulf Rdp, Bjt

January 18, 1991

MANAMA, Bahrain (AP) _ Iraq’s use of modified Scud missiles has raised the risk of doing business along one of the world’s most important, and deadliest, waterways.

Commercial vessels have continued to operate in the southern waters of the gulf while one of history’s biggest naval armadas wages war with Iraq to the north.

Some shipping executives said traffic was expected to begin dropping after Iraq fired a missile at the Saudi city of Dhahran early today, along with missiles at Israel.

″I would not go into the (Persian) Gulf now,″ said a shipping executive in Fujairah, outside the Strait of Hormuz at the opening of the gulf. He spoke on condition of anonymity.

Lloyd’s of London has urged merchant vessels to avoid the gulf, and insurance on shipping has also skyrocketed because of the crisis.

At the Saudi port of Dammam near Dhahran, a port authority official said shipping had been off for three days. But the official, who also asked not to be identified, attributed it to the vagaries of shipping schedules and not the war with Iraq.

″You have days when it is down,″ he said.

Dammam is a major port for American military transport vessels.

But an official with a shipping agent in Dammam, the Arabian Establishment for Trade and Shipping, said some ships destined for the port were instead loading cargo at Dubai to the south.

″There are no ships calling, especially Japanese ships,″ said manager Falah Abu Zaid. ″They have instructions to wait.″

Commodore Ken Summers, commander of Canadian forces in the gulf, told reporters Thursday that the strike by allied jets on targets in Iraq and occupied Kuwait have curtailed Iraq’s ability to hit commercial shipping with missile or air attacks.

But he noted more than 20 mines, some newly laid, have been found in the northern gulf.

Continued shipping traffic has given the volatile gulf a facade of normalcy. But some executives say shipping has slowed.

″Everybody seems to be nervous about moving vessels around,″ said Peter Whitbread, an official with the International Marine Services salvage firm at Dubai.

American oil tankers were still loading crude at the huge Ras Tanura oil installation, on the Saudi coast north of Dhahran, said port director Mohammed Ibrahim Taib.

The gulf is one of the most strategic waterways in the world, a highway for an estimated 8.5 million barrels of oil daily. More than 80 percent of the region’s oil passes through the gulf and out the Straits of Hormuz.

Fears that Iraq missiles and aircraft would cause major damage to Saudi oil installations and affect shipping in the area were important factors in the surge in world crude prices that followed the invasion of Kuwait on Aug. 2.

The only attack Iraq launched on oil installations Thursday was a small one. Iraqi artillery gunners shelled an installation owned by Japan’s Arabian Oil Co. in northern Saudi Arabia and hit two storage tanks.

Update hourly