Saudi Energy Minister Prince Abdulaziz bin Salman at Tuesday press conference discussing status of country’s oil industry.
And just like that, the great Saudi oil crisis of 2019 might be over.
In a press conference carried over the Internet, a significant step for the usually publicity-shy kingdom, Saudi energy minister Prince Abdulaziz bin Salman said half of the 5.7 million barrels/day of lost oil production has been restored.
The minister, generally known as ABS, said the country’s capacity would be increased to 11 million b/d by the end of this month and to 12 million b/d by the end of November. That would be a return to pre-bombing capacity, not production. Saudi production in August was 9.77 million b/d.
Oil markets already had digested the likelihood of a quick return to production following the publication of a Reuters story to that effect. Saudi Aramco, the country’s state oil company, also was reported to be telling customers that they would receive their full allotment of oil in October, though some customers for lighter grades might instead get heavier barrels. Supplies from its stocks are keeping Saudi customers supplied while production gets back to pre-attack levels.
At a little after 2 p.m. EDT, global crude benchmark Brent was down $3.77/barrel to $65.25, a drop of 5.46%. U.S. benchmark crude WTI had declined 5.06%, a drop of $3.18 to $59.72. Ultra low sulfur diesel was down 8.37 cts/gallon to just over $2/gallon, a decline of a little more than 4%.
But most of those declines came before the news on the back of the Reuters report; the actual press conference did not move the market. Prices still have not fallen to where they were at the close of last week before the attacks on Saudi facilities, including the key Abqaiq processing operation.
At Abqaiq, the facility is processing 2 million b/d of crude, down from 4.9 million b/d before the bombings, according to officials at the press conference. The Saudi industry was also hit by attacks on the Khurais field, which produces 1.5 million b/d.