Oil prices settled after an initial spike in early trading on 16 September following the attacks on Saudi Arabia’s Abqaiq and Khurais oil production facilities that have resulted in the suspension of 5.7 million barrels a day (b/d) of oil production.
The price of Brent crude jumped by more than $11 to $71.95 a barrel during early morning trading in the Far East. The price then fell to $66.13 a barrel by the start of business in the Gulf. Prices closed at $60.22 a barrel on 13 September.
US President Donald Trump said overnight that the US would release oil held in a strategic oil reserve, a move that will help alleviate the pressure on the oil price.
Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount….
— Donald J. Trump (@realDonaldTrump) September 15, 2019
It is not yet clear how long Saudi oil production will be disrupted for. On 14 September, Saudi Aramco said emergency crews had contained the resulting fires at Abqaiq and Khurais, adding that the firm would publish an update in 48 hours.
In addition to the disruption to oil production, Saudi Arabia’s Energy Ministry said the attacks have also suspended the production of an estimated 2 billion cubic feet a day of associated gas used to produce 700,000 b/d of natural gas liquids. This will reduce the supply of ethane and natural gas liquids by up to about 50 per cent.
For the local market, the Energy Ministry said the attacks have not affected the supply of electricity and water from fuel, or the supply of fuel to the local market.
MEED comment: Saudi oil attacks will test commitment to transparency
|This article has been unlocked to allow non-subscribers to sample MEED’s content. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here|