WA Premier Mark McGowan says state law may be used in the future to stop livestock carriers from leaving if they breach animal welfare standards.
MV Awassi Express remains at Fremantle Port as it undergoes improvements to meet Australian airflow standards, after 2400 sheep died from extreme heat during a voyage to the Middle East in August 2017.
MV Maysora departed for Turkey last week with 77,000 sheep and 9500 cattle on board amid ongoing concerns about the industry.
Mr McGowan said he was willing to look at the legal options available under the Animal Welfare Act if there were breaches of Australian standards in the future.
"I'd be open to it if we got the right legal advice and we knew these ships were engaged in some appalling conduct," he told reporters on Sunday.
"We're not saying close the industry down, but what we are saying at this point is if there are examples like we saw recently, well then we'll use state law, if we can, to try and arrest and fix the problem we're facing."
Mr McGowan said the industry was "running close to the wire".
"Obviously the imagery that came out ... was shocking and appalling and I don't think any Australian would be unmoved by that," he said.
"They're running now on borrowed time and unless they start doing everything right, I think there will be a national move to close them down.
"We're obviously looking at what we can do to prosecute when they do the wrong thing."
WA Agriculture Minister Alannah MacTiernan has previously called for a ban on live exports in the northern hemisphere summer.
WA Opposition leader Mike Nahan said the state government should not "play politics" with the issue and must allow the federal government to deal with the industry.
"If it doesn't improve, if we get another example of what happened two weeks ago, it will be shut down and it should be shut down," he told reporters.
Former federal cabinet minister Sussan Ley wants to ban live sheep exports to the Middle East, and the regional Liberal MP will introduce a private member's bill next month.
Heads of the National Farmers' Federation and WAFarmers will meet with Ms Ley on Monday to stress the economic importance of the trade.
