Despite Attack Aramco Still Delivers for its Customers
Saturday’s attacks cut Saudi output by more than half. On Tuesday evening, the top officials of the Saudi oil industry made a big announcement.
Saudi Arabia’s production capacity would be “fully restored” by the end of September.
Oil prices fell after the update, but have been rising since. Prices rose by about 1.5 percent on Thursday to about $65 a barrel for Brent crude.
If that pace of recovery seems almost impossible, it is. Analysts say the effects of the attacks on two key facilities are likely to last for weeks or even months.
“We are certainly expecting some disruption and restriction to continue at least into November,” said Richard Mallinson, an analyst at Energy Aspects.
Since the attacks, Aramco has kept its exports at around 6.5 million barrels a day. (slightly below normal levels). Analysts say that the company is likely taking oil out of storage and selling it in the export market. It also seems to be purchasing oil products, like diesel fuel, to send to international customers that it may not be otherwise able to supply.
“Existing production would not support on its own that level of exports,” said David Fyfe, chief economist of Argus Media, a firm that specializes in commodity pricing.
If another shock comes — and it certainly could in the volatile Persian Gulf region — there will be less oil available to provide a cushion.
Despite the attack and the current issues facing the oil industry, the Saudis appear to be set on keeping Aramco’s initial public offering alive and want to convince investors that the attacks have not damaged the company’s value. At Tuesday’s news conference, Aramco said that the I.P.O. was on track and expected in the next 12 months.