With just over a week since Saudi Arabia suffered the most devastating attack in its history, Riyadh is close to restoring full oil output. The quick turn-around is likely to come as a surprise. The drone strike at Abqaiq, described as the heart of the kingdom’s oil industry, nearly halved Riyadh’s capacity through the loss of 5.7 million barrels a day or the equivalent of five per cent of global supplies.
While questions loom over the vulnerability of Saudi oil facilities and the implications of such a risk on the world’s largest exporter of oil, Riyadh is reported to have restored more than 75 per cent of crude output and is expected to return to full volumes by early next week.
Saudi Energy Minister Prince Abdulaziz Bin Salman and the chief executive of state oil company Aramco, Amin Nasser, were reported by Reuters giving an update on the repairs to the damage caused by the attacks claimed by the Houthis, a Yemani rebel group that has stifled Saudi and UAE efforts to prop up the internationally-backed government. The oil processing plant, according to the officials is expected to be fully back online by the end of September.
The kingdom has taken a number of steps to avoid any disruption to its export. Riyadh has managed to maintain supplies to customers to the levels they were at prior to the attacks by drawing from its huge oil inventories and offering other crude grades from other fields, the Saudi officials said. It was also forced to scour global markets and began importing oil to meet its energy needs.
Saudi promised to ensure full oil supply commitments to its customers. The kingdom ships more than seven million barrels per day to global destinations and for years has served as the supplier of last resort to markets.
The Wall Street Journal reported on yesterday that repairs at the plants could take months longer than anticipated but it seems that this may not be the case.
Thousands of employees and contractors are said to have been pulled from other projects to work around the clock in bringing production back. Parts were quickly imported from Europe and the US to repair the damage.
The quick turn around may allay some of concerns over the kingdom’s resilience to such attacks. It demonstrates to an important degree Riyadh’s capacity to deal with such eventualities.