The CEO of oil giant Chevron said on Tuesday that ongoing tensions in the Red Sea are causing an “extreme impact” on oil flows and prices as Yemen's Houthi rebels step up attacks on Israel and commercial shipping in the region. It warned that it posed a “real” risk.
Question from CNBC Regarding the impact of the Houthi attack on global oil supplies, Chevron CEO Michael Wirth said: In short, employee safety is the most important thing we strive for every day. We have ships that ply the Arabian Gulf and the Red Sea. ”
“We are coordinating all vessel movements with the US and other military authorities in the region, but this is a very serious situation. The situation appears to be worsening,” he continued.
CNBC's “Squawk Box” anchor Rebecca Quick noted that as of Tuesday morning, U.S. crude oil was trading below $73 a barrel, and asked Wirth if he was surprised to see that. Ta.
“To do [surprise me] Because the risks are very real,” Wirth said. “And so much of the world's oil flows flow through that region that if that region were cut off, I think you could see the situation change quickly.”
Iran-backed Houthi rebels have carried out a series of attacks on commercial vessels and shipping in the Red Sea, a key trade route for oil companies. The rebels claim the attack was part of a maritime operation to protest Israel's shelling of Gaza in the war against Hamas, but the attack was carried out against multiple vessels with no connection to the Jewish state. It is being done.
Following an increase in attacks in the region, the US has launched a counterattack against military targets in Yemen, and the Biden administration is now considering reimposing the terrorist designation of the Houthis. President Biden stripped the Foreign Terrorist Organization (FTO) label against the Houthis in February 2021, following concerns that it would prevent aid groups and companies from providing humanitarian assistance.
White House National Security Council Press Secretary John Kirby told reporters on Tuesday: “We have no updates yet on the FTO designation.” “We are still considering it.”
The attacks have forced several oil companies, including BP, AP Moller-Maersk, MSC, Hapag Llyod and CMA CGM, to reroute their travel routes in recent weeks, putting them at risk of shipping delays and higher oil prices. exposed.
British oil giant Shell suspended all shipments through the Red Sea on Tuesday, officials said. told the Wall Street Journal (WSJ).
Wirth said Chevron has been “able to sustain” movement across the region, but noted it's an “evolving situation.”
“We need to watch it really closely,” he said.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
