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Half of Saudi oil output offline after drone strikes
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<blockquote data-quote="SlugSlinger" data-source="post: 3271798" data-attributes="member: 7248"><p><span style="font-size: 22px"><strong>OPEC, Russia Hold Off Pumping More Oil After Saudi Attack</strong></span></p><p><span style="font-size: 18px"><strong>Saudi Arabia will tap into stocks, officials say, as they worry fellow OPEC members might overproduce</strong></span></p><p>By</p><p>Benoit Faucon in London,</p><p>Summer Said in Dubai and</p><p>Georgi Kantchev in Moscow</p><p>Updated Sept. 16, 2019 6:10 pm ET</p><p></p><p>OPEC and Russia are so far holding off pumping more oil to fill potential gaps in global supplies after an <a href="https://www.wsj.com/articles/drone-strikes-spark-fires-at-saudi-oil-facilities-11568443375?mod=article_inline&mod=article_inline" target="_blank">attack in Saudi Arabia</a> over the weekend led to a major crude disruption, officials said.</p><p></p><p><a href="https://www.wsj.com/articles/oil-prices-soar-after-saudi-attack-11568585160?mod=article_inline" target="_blank">Crude prices surged on Monday</a> in the aftermath of a weekend attack on Saudi Arabia’s crude production infrastructure. Officials said the Saudi Arabian Oil Co., known as Aramco, aimed to restore about a third of the disrupted output by day’s end on Monday.</p><p></p><p></p><p>Saudi Arabia held a series of calls with cartel members and other oil-producing allies over the weekend and told producers that they wouldn’t need to respond with additional output, Saudi and OPEC officials said. Saudi energy officials fear that other members might begin pumping too much and take away some of the kingdom’s market share, Saudi oil officials and advisers said. Saudi officials told cartel members that the kingdom would mitigate the outage by tapping into its reserves, the Saudi and OPEC officials said.</p><p></p><p>The strikes knocked out 5.7 million barrels of daily production, about half of Saudi capacity. One of the main targets of the attack was a large crude-processing plant in Abqaiq—the largest of its kind in the world.</p><p></p><p></p><p>Meanwhile, the attacks also targeted the Khurais oil field. According to early damage reports, four of five processing lines at were damaged, people familiar with the matter said. Each line has the daily capacity of some 300,000 barrels of crude.</p><p></p><p>At Abqaiq, at least two of seven stabilization facilities were severely damaged and have to be rebuilt, which could take months. Three others were hit. The units process crude to make it safe to ship. Ten of 18 of the plant’s desulphurization towers were hit, too, though it was unclear how badly. The towers reduce the sulphur content of Saudi’s heavier crudes.</p><p></p><p>“There are units that were completely destroyed and have to be rebuilt,” one Aramco executive said.</p><p></p><p>Still, Sara Vakhshouri, president of Washington, D.C., consulting firm SVB Energy International, said, “The Kingdom has enough domestic crude oil inventories to cover its production suspension of 5.7 (million barrels a day) for almost 30 days.”</p><p></p><p>President Trump provided some relief late Sunday by authorizing the release of oil from the U.S. Strategic Petroleum Reserve if needed to stabilize energy markets. The president also said he had “informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.”</p><p></p><p>Mohammed Barkindo, the secretary-general of the Organization of the Petroleum Exporting Countries, ruled out an emergency meeting after speaking to the International Energy Agency and officials in Saudi Arabia, OPEC officials said.</p><p></p><p>Russia, a key participant in an OPEC-led agreement to cut production, also doesn’t see the need for emergency measures, according to statements Monday from Russian Energy Minister Alexander Novak.</p><p></p><p>“Right now there is a fairly large amount of reserves in the world” to compensate for the decline in Saudi output, Mr. Novak was quoted as saying by Russian newswire Interfax. “There is no need to take some sort of extra urgent [measures],” he said.</p><p></p><p>0:00 / 3:21</p><p></p><p></p><p>Saudi Oil Attacks to Be Felt From California to China</p><p></p><p>The strikes on Saudi Arabia’s oil infrastructure have led to a production shutdown on a scale the world hasn’t seen for decades. It could have long-lasting consequences for global markets and politics. Photo: Reuters</p><p>The cautious global response comes after Saudi Arabia assured OPEC and Russia that its ability to meet demand was under control, according to Saudi and OPEC officials. The kingdom is concerned producers such as Iraq and Nigeria, which were recently persuaded to comply with OPEC’s production cuts, may now renege on their plans, said a Saudi oil adviser.</p><p></p><p>“They don’t want others to come out of the box. Otherwise they won’t come back in,” said the adviser.</p><p></p><p>Saudi officials said they still believe they can fully replace its sidelined production in coming days. That would require tapping oil inventories and using other facilities to process crude.</p></blockquote><p></p>
[QUOTE="SlugSlinger, post: 3271798, member: 7248"] [SIZE=6][B]OPEC, Russia Hold Off Pumping More Oil After Saudi Attack[/B][/SIZE] [SIZE=5][B]Saudi Arabia will tap into stocks, officials say, as they worry fellow OPEC members might overproduce[/B][/SIZE] By Benoit Faucon in London, Summer Said in Dubai and Georgi Kantchev in Moscow Updated Sept. 16, 2019 6:10 pm ET OPEC and Russia are so far holding off pumping more oil to fill potential gaps in global supplies after an [URL='https://www.wsj.com/articles/drone-strikes-spark-fires-at-saudi-oil-facilities-11568443375?mod=article_inline&mod=article_inline']attack in Saudi Arabia[/URL] over the weekend led to a major crude disruption, officials said. [URL='https://www.wsj.com/articles/oil-prices-soar-after-saudi-attack-11568585160?mod=article_inline']Crude prices surged on Monday[/URL] in the aftermath of a weekend attack on Saudi Arabia’s crude production infrastructure. Officials said the Saudi Arabian Oil Co., known as Aramco, aimed to restore about a third of the disrupted output by day’s end on Monday. Saudi Arabia held a series of calls with cartel members and other oil-producing allies over the weekend and told producers that they wouldn’t need to respond with additional output, Saudi and OPEC officials said. Saudi energy officials fear that other members might begin pumping too much and take away some of the kingdom’s market share, Saudi oil officials and advisers said. Saudi officials told cartel members that the kingdom would mitigate the outage by tapping into its reserves, the Saudi and OPEC officials said. The strikes knocked out 5.7 million barrels of daily production, about half of Saudi capacity. One of the main targets of the attack was a large crude-processing plant in Abqaiq—the largest of its kind in the world. Meanwhile, the attacks also targeted the Khurais oil field. According to early damage reports, four of five processing lines at were damaged, people familiar with the matter said. Each line has the daily capacity of some 300,000 barrels of crude. At Abqaiq, at least two of seven stabilization facilities were severely damaged and have to be rebuilt, which could take months. Three others were hit. The units process crude to make it safe to ship. Ten of 18 of the plant’s desulphurization towers were hit, too, though it was unclear how badly. The towers reduce the sulphur content of Saudi’s heavier crudes. “There are units that were completely destroyed and have to be rebuilt,” one Aramco executive said. Still, Sara Vakhshouri, president of Washington, D.C., consulting firm SVB Energy International, said, “The Kingdom has enough domestic crude oil inventories to cover its production suspension of 5.7 (million barrels a day) for almost 30 days.” President Trump provided some relief late Sunday by authorizing the release of oil from the U.S. Strategic Petroleum Reserve if needed to stabilize energy markets. The president also said he had “informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.” Mohammed Barkindo, the secretary-general of the Organization of the Petroleum Exporting Countries, ruled out an emergency meeting after speaking to the International Energy Agency and officials in Saudi Arabia, OPEC officials said. Russia, a key participant in an OPEC-led agreement to cut production, also doesn’t see the need for emergency measures, according to statements Monday from Russian Energy Minister Alexander Novak. “Right now there is a fairly large amount of reserves in the world” to compensate for the decline in Saudi output, Mr. Novak was quoted as saying by Russian newswire Interfax. “There is no need to take some sort of extra urgent [measures],” he said. 0:00 / 3:21 Saudi Oil Attacks to Be Felt From California to China The strikes on Saudi Arabia’s oil infrastructure have led to a production shutdown on a scale the world hasn’t seen for decades. It could have long-lasting consequences for global markets and politics. Photo: Reuters The cautious global response comes after Saudi Arabia assured OPEC and Russia that its ability to meet demand was under control, according to Saudi and OPEC officials. The kingdom is concerned producers such as Iraq and Nigeria, which were recently persuaded to comply with OPEC’s production cuts, may now renege on their plans, said a Saudi oil adviser. “They don’t want others to come out of the box. Otherwise they won’t come back in,” said the adviser. Saudi officials said they still believe they can fully replace its sidelined production in coming days. That would require tapping oil inventories and using other facilities to process crude. [/QUOTE]
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