This archive report was first published on 19 September 2019.
Published on September 19, 2019, Saudi Arabia's oil industry officials delivered a reassuring message about the country's production capacity, which had been severely impacted by the aerial attack on Saturday.
According to Saudi Aramco, the national oil company, the production capacity would be 'fully restored' by the end of September. However, analysts say that while some output has been restored, the effects of the attack on two key facilities are likely to persist for weeks or even months.
Richard Mallinson, an analyst at Energy Aspects, a London-based market research firm, stated, 'We are certainly expecting some disruption and restriction to continue at least into November.'
Despite Aramco's efforts to repair its damaged facilities, oil prices have been creeping higher, rising by about 1.5 percent on Thursday to around $65 a barrel for Brent crude. This increase in prices is attributed to growing skepticism about Saudi Arabia's ability to quickly return output to normal.
Aramco is employing various strategies to maintain its exports, including diverting supplies that might have otherwise gone to domestic refineries to international customers. The company is also purchasing oil products that it usually exports in substantial quantities, such as diesel fuel, to send to international customers.
Analysts believe that Aramco's primary motivations are to preserve its reputation as a reliable oil supplier and to convince investors that the attacks have not damaged the company's value. The company's initial public offering, which was recently revived, is expected to take place within the next 12 months.
However, maintaining near-normal output levels depends on how quickly Saudi output can be restored. David Fyfe, chief economist of Argus Media, stated, 'Existing production would not support on its own that level of exports.'
