The tanker sector is facing a situation where there might not be enough ships to keep rerouting cargoes around South Africa.
That is the warning from Kuwait Petroleum Corp (KPC) chief executive Shaikh Nawaf al-Sabah.
Al-Sabah told CNBC: “One of the things I think we may be concerned about is if this continues for another six months, that we will not have perhaps the tanker fleet available to continue to go around.”
Most of the world’s tankers have been avoiding the Red Sea due to Houthi attacks on vessels.
KPC itself has diverted a “substantial” number of its exports around the Cape of Good Hope, al-Sabah said.
He did not provide specific numbers, but said decisions are being made on routing on a daily basis.
“We maintain a strategic tanker fleet for these types of reasons,” al-Sabah added.
“We’re comfortable that we can supply our customers in the quantities that are required on time without issue, but I don’t know how many other producers have that strategic vision,” he explained.
However, al-Sabah does not foresee Middle East tension leading to a wider war that could disrupt crude shipments.
He argued that despite many conflicts in the region, the only time Kuwait was unable to move its oil was during Iraq’s invasion in 1990.
No supply fear
“I don’t see a supply fear,” al-Sabah told CNBC. “I am confident that the industry and the system is well equipped to handle potential supply crises that might happen.”
Chevron chief executive Michael Wirth told CNBC the security situation in the region “could pivot on a dime.
The US oil major is “not moving ships to the Red Sea”, he said.
“Today the conflict in Israel and Gaza goes on, a resolution does not seem to be at hand and the regional risks continue to be high,” Wirth added.
