Saudi Aramco Restores Oil Production Capacity To Pre-Attack Levels

Comments

• Mamdouh Salameh - 25th Sep 2019 at 12:06pm:
  Given the considerable damage sustained by Saudi Aramco oil infrastructure, Reuters quoting unnamed sources and claiming that Saudi Aramco has restored oil production capacity to pre-attack levels could only be fake news.
  
  Reuters quoting an unnamed sources claimed that the Khurais oilfield is now back to full production at 1.3 million barrels a day (mbd) of light oil as of last Monday at a time when Saudi Aramco has been telling its customers that some lighter grades would likely be replaced with heavier crude grades.
  
  Moreover, Wall Street Journal reported two days ago that it was informed by contractors and fabricators that repairs to Saudi Aramco infrastructure is going to take months rather than weeks as the Saudis are suggesting. It also reported that Saudi Aramco was offering to pay a premium for speedy repairs.
  
  Dr Mamdouh G Salameh
  International Oil Economist
  Visiting Professor of Energy Economics at ESCP Europe Business School, London
• Lee James - 25th Sep 2019 at 10:09pm:
  Regardless of what the actual repair time is, we are reminded once again of oil supply and environmental risk. Risk is part of oil's total cost, less subsidies . . . and the various billions of subsidies propping up oil need to end.
• William Edwards - 26th Sep 2019 at 10:44am:
  Much confusion has arisen due to the inability of most observers to distinguish between production and production capacity. If a facility is only operating at half capacity, then a 50% loss of capacity has zero impact on production. Accordingly, on the night of the bombing, I advised as follows: "This may be a different take from that you get from your professional cohorts, but I thought I would let you know what is actually going to happen as a result of the attack on the Saudi production facilities. The Saudis have so much spare capacity that they will not lose any production. No customers will be turned away. They may even get a little bit of additional outlet if the speculators put oil in storage in order to capitalize on a hoped-for price boost. But the Saudi‘s will reap higher prices for their own oil as long as the turmoil keeps prices boosted. So the attackers have probably done the opposite of what they want. They have actually helped the Saudis get more income for their production." Thus, events have transpired as expected, if the expectations were soundly based, rather than being sensationalized with superficial assessments.