A full restoration of Saudi Aramco’s processing capabilities will “likely take weeks”, following drone attacks on two facilities on 14 September.
The attacks on a crude-processing facility in Abqaiq and oil field in Khurais resulted in the suspension of the production of 5.7m barrels of crude oil, approximately 50% of Saudi Aramco's daily production.
Saudi Arabia’s Ministry of Foreign Affairs said initial investigations indicated the weapons used in the attack were Iranian, but confirmed investigations were ongoing to determine the source of the attack.
“The kingdom condemns this egregious crime, which threatens international peace and security, and affirms that the primary target of this attack is global energy supplies, as this attack is in line with the previous attacks against Saudi Aramco pumping stations using Iranian weapons,” it said.
Following the attacks, Saudi Aramco chairman and CEO Amin Hassan Al-Nasser said work is underway to recover the quantities of production.
While redundant processing capacity should enable some of the affected output to return quickly, “a full restoration will likely take weeks,” said research consultancy Energy Aspect.
The consultants added the attack raises concerns about the security of oil infrastructure in Saudi Arabia as drones can operate over large distances, are accurate and cheap to make.
“Saudi Arabia’s heavy defence spending does not offer reliable protection against this emerging threat… The potential for more attacks of this type against oil facilities, along with further escalation of US-Iran tensions, is likely to prompt the market to price in more of the existing geopolitical disruptions and risks to supply.”
Jonathan Owens, logistics expert at the University of Salford Business School added: “There is claim from Saudi sources that most of the production will be back to normal in the coming days, however what is evident from media pictures is the processing plant sustained some significant damage and getting it fully operational and linking up with the supply chain could take weeks, rather than days.
“This is probably the expectation of the US administration particularly, as Trump has authorised the release of oil from the US Strategic Petroleum Reserve, in order to shore up and offer stability to the US supply.
“There is a certain amount of volatility in the direct supply. What is evident is prices at the pumps will now be dictated due to this and the use of the reserve supply.”
Prince Abdulaziz bin Salman bin Abdulaziz, the kingdom’s minister of energy, said the attacks were not only aimed at the vital installations of the country, but also on global oil supply and its security and posed a threat to the global economy.
Houthi rebels in Yemen have claimed responsibility for the attacks, which they said were in response to military action taken by Saudi Arabia. The rebels have been backed Iran. The US has accused Iran of being behind the attacks.
Bahrain, whose armed forces are involved in the Yemen conflict, said operations at the Bapco (Bahrain Petroleum Company) refinery would be continuing.
The country’s National Oil and Gas Authority (NOGA) said: “All our facilities continue to operate safely and we keep all relevant parties informed of the situation and what we will be doing in response to these events, while continuing to update our plans in the light of new developments in this regard.”
NOGA confirmed it was in close contact with Aramco and it would continue to evaluate the situation and its impact on operations.
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