Chevron CEO Says Red Sea Attacks Pose Real Threats To Oil Prices

(RTTNews) - Chevron (CVX) CEO Michael Wirth has warned that if tensions were to further escalate in the Middle East, the Red Sea crisis would pose a serious threat to the oil flows and prices.

On Tuesday, in an interview at the World Economic Forum in Davos, Switzerland, Wirth told CNBC that the situation is "very serious and seems to be getting worse."

He added, "So much of the world's oil flows through that region, that were it to be cut off, I think you could see things change very rapidly."

While talking about the U.S. oil prices, Wirth told CNBC that he was surprised to see the crude oil trading below $73 per barrel.

The shipping giant, Chevron's vessels pass through the Arabian Sea and the Red Sea regularly. In order to ensure the safety of its employees, the company has been keeping an eye on the Houthi attacks.

"We coordinate every vessel movement with U.S. and other military authorities that are in the region," Wirth commented. "We really have to watch very carefully."

Wirth said that Chevron's two vessels were attacked last year by the Iranian Navy, one was hijacked by the commandos and taken to an Iranian port, while the other was under attack for four hours until the U.S. Navy intervened.

Houthi attacks have become a regular occurrence in the Red Sea route since November. They are claiming to avenge Israel's operation against Hamas in Gaza, by attacking commercial vessels passing through that route.

In a bid to avoid the attacks, many shipping companies chose to divert their ships towards the Cape of Good Hope route, while other shipping companies such as BP, Shell, and Qatar Energy decided to suspend their shipments for an indefinite period. Wirth said Chevron has been "able to maintain" movements throughout the region while keeping in mind that it is an "evolving situation".