1. The Chinese owner of an LNG carrier could face insurance payout complications after its $120 million vessel, the GasLog Shanghai, was struck in the Strait of Hormuz while transiting with its tracking system switched off. [para. 1][para. 2][para. 6]
2. The tanker, owned by a unit of CDB Financial Leasing, was hit on July 31, damaging its engine, though all crew were safe and it anchored at Khor Fakkan in the UAE. [para. 2][para. 3] A second vessel, the GasLog Salem ($128 million), was attacked by a drone near Egypt on July 29, causing no injuries. [para. 4][para. 15]
3. War-risk insurers can reject the claim because the ship's AIS was switched off. [para. 6][para. 7] The vessel stopped transmitting on July 9, resumed to load LNG in Qatar on July 27, and disabled AIS again when it entered the Strait on July 31, the evening it was struck. [para. 8][para. 9] Broadcasting makes a ship a target, while disabling AIS violates protocols, a key dilemma in conflict zones. [para. 10]
4. Adding another layer of uncertainty, it is unclear whether charterer GasLog Ltd. had permission from CDB Financial Leasing for the risky passage. [para. 11] Chinese lessors typically forbid such crossings without additional safeguards, so GasLog could face a breach-of-contract claim if it acted without approval. [para. 11][para. 12]
5. The Bermuda-flagged GasLog Shanghai was built in 2013 and can carry 155,000 cubic meters of LNG. [para. 14] CDB Financial Leasing purchased the two ships from GasLog in October 2021 for a combined $248 million and leased them back on a five-year term ending in October 2026. [para. 14][para. 15]
6. Large LNG carriers are among the most valuable commercial vessels, costing $200 million to $300 million to build. [para. 16] The lease structure exposes CDB Financial Leasing to significant risk because GasLog has no repurchase obligation when the contracts expire. [para. 17] CDB Financial Leasing has not issued a statement regarding the attacks. [para. 13]
7. The attacks highlight the growing geopolitical risks in the Strait of Hormuz, a vital waterway for global energy supplies. [para. 18][para. 19] Ships face a dual threat: the U.S.-recommended Oman-side channel invites Iranian attacks, while the northern corridor risks interception by the U.S. military. [para. 19] This has sharply restricted LNG traffic through the Strait. [para. 20]
8. Qatar and the UAE together supply roughly 20% of the world's liquefied natural gas. [para. 20] Between March and June 2026, their combined LNG output plunged nearly 80% compared to the same period in 2025. [para. 21] China, a major buyer, imported 4.47 million metric tons of LNG from Qatar in the first half of 2026, a 54% decline year-on-year. [para. 20][para. 22]
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