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Attack on Saudi Oil Production Triggers Fears for Global Oil

Mid-September’s drone and missile attack on Saudi pipelines and crude oil processing plants at Abqaiq and Khurais knocked out half of Saudi oil production and caused a 20 percent surge in the price of Brent crude, the largest intraday percentage rise since Saddam Hussein invaded Kuwait in 1990.  Prices later fell after Saudi Arabia, which supplies more than ten percent of global crude, announced that it had restored half of the lost production and would restore the rest by the end of the month. Saudi crude production before the attack was some 9.7 million barrels a day, or five percent of global output. At the end of September, Saudi Aramco officials claimed it had fully restored production to pre-drone attack levels. Meanwhile, the price of Brent crude was at $61.30 a barrel, which is well below Brent’s 12-month high of $86.29 a barrel seen in October 2018.

Responsibility for drone attack

Responsibility for the attack has been claimed by Yemen’s Houthi movement, but both Saudi and American government spokesmen have claimed that Iran is responsible. Abqaiq is the world’s largest oil processing facility and crude oil stabilization plant with a processing capacity of over 7 million barrels per day (bpd).  Khurais has the capacity to pump around 1.5 million bpd.  Whatever the case, the ease with which the attack was mounted raises fears of future strikes, which could potentially lead to global recession.

Read more https://www.rigzone.com/news/attack_on_saudi_oil_production_triggers_fears_for_global_oil-01-oct-2019-159942-article/

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