Mubasher: The impact of the recent attacks in Saudi Arabia on oil prices remains unknown; however, with the global demand forecasts being revised downwards based on trade wars and economic downturn, the impact might be limited unless a significant impact on KSA’s production and exports is witnessed, Refinitiv Oil Research said.
Since the attack was over the weekend on 14 September, the reaction of the oil market would be determined when they open on Monday based on any information or updates on the extent of damage, Refinitiv further noted.
In the weekend, the attack on the facilities of Saudi Aramco in Abqaiq and Khurais was “A result of Terrorist attacks with Projectiles”, which resulted in a production suspension of 5.7 million barrels per day (bpd) of crude oil.
Reuters OPEC’s latest survey highlighted that Saudi Arabia produced 9.63 million bpd of crude oil in August 2019; this results in almost 60% of the production being suspended due to the attack.
Refinitiv Oil Research has issued a media advisory on the current state of events and the potential disruption to the oil markets following the attack where it concluded “According to Aramco, the Abqaiq facility is the largest crude oil stabilisation plant in the world which processes more than 7 million bpd of crude. Considering the plant plays a vital role in removing the sulphur impurities and reducing the vapour pressure of the crude in order to make it safe for being transported by tankers, exports from the kingdom’s main terminals of Ras Tanura and Juaymah could be expected to have an impact.”
Port agents informed Refinitiv Oil Research that according to the instruction received from Aramco OSPAS (Oil Supply, Planning, and Scheduling) department, the vessels at anchorage are “still on-hold until further notice”, yet no further details were disclosed.
According to Refinitiv ship tracking data, “Only 1 VLCC has been berthed in Ras Tanura Sea Island terminals and Juaymah crude terminals since yesterday with all other berths and SBM’s remaining vacant.”
Refinitiv Oil Research pinpointed that “Refinitiv flows data indicate a year-to-date average of 6.29 million bpd departing from Ras Tanura – this is more than 3 VLCC departures every day from the port. Comparing that to the present line up of ships at the berth, there is expected to be a sharp drop in exports this week.”
An impact to the exports from Saudi Arabia are expected to be seen if there is an extended delay in bringing the processing plants back in operation, although the attacks might not have an immediate impact on the crude production, Refinitiv Oil Research said.
