Japan's second-largest shipping company, Mitsui O.S.K. Lines (MOL), is operating as usual in the Gulf while closely monitoring the situation in the region, CEO Takeshi Hashimoto said on Tuesday.
"We are operating so many containers, car carriers and chemical tankers so that it is very, very difficult for us to reduce or stop with the service," Hashimoto told Reuters on the sidelines of the Energy Asia conference.
Shippers re-routed via the Cape of Good Hope after Yemeni Houthis attacked ships in the Red Sea, but there is no alternative route for shipments in the Gulf, he added.
About a fifth of the world's total oil consumption passes through the Strait of Hormuz, a critical waterway between the Gulf and the Gulf of Oman.
MOL has 15-20 vessels that regularly go through the Gulf, Hashimoto said, adding that the company is watching the situation 24/7 and evaluating risks across its fleet.
Ships that are related to Israel or carry U.S. and UK flags are at maximum risk, Hashimoto said.
MOL could increase ocean freight rates at some stage with the addition of insurance and security costs, he added.
The company will also continue to avoid shipping in the Red Sea, Hashimoto said.
Separately, MOL, the world's largest LNG carrier, is in talks with the European Union to lift sanctions from its liquefied natural gas tankers.
"We provided a tanker to Yamal LNG project which was not a target of sanctions," Hashimoto said, referring to the Russian export project. "Therefore we are strongly confident that our vessel should not be a target of sanctions."
The shipping industry is also caught in the U.S.-China trade war as the world's top LNG producer plans to impose port charges for ships built or owned by Chinese. China, the world's top importer, requires LNG vessels calling at its ports to be built in the country, Hashimoto said.
If the trade war continues, it will create an "awkward" situation for shipping firms, he added.
MOL has not stopped building new ships in China, but will assess the situation for future new-builds and replacements, he said. However, it will be challenging to find another shipbuilder that can build 10 ships in one go, he added.
The company plans to expand its LNG fleet from 108 vessels now to around 150 by 2030.
(Reuters)
