Exxon Mobil has evacuated non-essential employees from its operations in the Middle East, CEO Darren Woods said in an interview on Tuesday, as the U.S.-Israel war on Iran continues.
Some operations have been scaled back to manage oil inventory levels as traffic through the Strait of Hormuz has been challenged, he said. Exxon is a minority partner in oil and gas projects in the UAE, Qatar and Saudi Arabia.
"Our first and highest priority is making sure our people remain safe, and we evacuated folks who weren't critical or essential to the operations that we were providing support for," Woods said.
Traffic through the Strait of Hormuz, an important waterway between Iran and Oman that sees one-fifth of the world's oil supply pass through it, has effectively halted after Iran threatened to attack tankers that attempt to pass. U.S. President Donald Trump on Monday threatened to escalate the war with Iran if it blocked oil shipments from the Middle East, even as he predicted a quick end to the conflict.
With exports strained, oil producers have cut output at some oilfields as storage capacity runs out.
"The ability to manage ... inventory becomes very challenged, and many of the operations are pulling back simply to manage inventory levels as the logistics in the supply chain and the flow through the Strait get worked (through) with time," Woods said.
About 20% of Exxon's oil and gas production is in the Middle East, according to analysts from Jefferies. Nearly 60% of the U.S. oil major's liquefied natural gas business is concentrated in the region, according to TD Cowen.
(Reuters- Reporting by Sheila Dang in Houston; Editing by Chizu Nomiyama and Nathan Crooks)