Saudi Arabia says attacks cut off half of output, to open stockpiles

Abdulaziz bin Salman bin Abdulaziz, Saudi Arabia’s Minister of Energy has said that the drone attacks on its oil facilities knocked out 5.7million barrels of oil per day (bpd).

“Part of the decline will be compensated for its customers through stocks,” the minister explained in a press release.

Saudi Arabia is one of the biggest oil producers in the world and often seen as swing producer helping to rebalance oil markets. It holds millions of barrels in tanks inside the kingdom as well as in the Netherlands, Japan, and Egypt.

Abdulaziz also said that these explosions have also led to the cessation of the production of associated gas estimated at (2) billion cubic feet per day, used to produce 700 thousand barrels of natural gas liquids, which will reduce the supply of ethane and natural gas liquids by up to about fifty percent.

The drone attacks on Saturday against the world’s largest oil processing facility in Saudi Arabia by Yemeni rebels has led to a shut-in of about 17 percent of global oil production.

Though Saudi Arabia has the capacity to produce 10.3million barrels a day, it is keeping oil exports below 7 million bpd in September by allocating less crude than customers demand to stabilise the market.

Meanwhile, Mike Pompeo, US, Secretary of state has blamed the attack on Iran.

“Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy. Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world’s energy supply. There is no evidence the attacks came from Yemen,” Pompeo said on Twitter.

 

ISAAC ANYAOGU