OPEC has sufficient spare capacity to respond to supply shortages after this weekend's attacks on oil infrastructure that took more than half of Saudi Arabia's oil production offline, Suhail Al Mazrouei, the energy minister of the United Arab Emirates (UAE), said on Monday.
On Saturday, the Abqaiq facility and the Khurais oil field in Saudi Arabia were hit by attacks, which resulted in the suspension of 5.7 million bpd of Saudi Arabia's oil production.
"We have spare capacity, there are volumes that we can deal with as an instant reaction but we need to analyse the full impact, and the assessment of the incident is under way in Saudi Arabia," Al Mazrouei said, as carried by The National.
The UAE will support Saudi Arabia, if needed, he added.
"We as the UAE, as a member of OPEC, stood fast and ready to support KSA in any shape or form. The technical side, from supply, if there is a shortage. We have certain capacity that we can put in the market," Al Mazrouei said.
Still, the UAE energy minister, as well as OPEC's Secretary General Mohammad Barkindo, said it was too early to rush into emergency meetings and put extra supply on the market, at least until Saudi Aramco provides the first updates about how long it would take to restore production.
The Saudis haven't declared any force majeure, the situation is under control, and Saudi Arabia has ample supply, OPEC Secretary General Mohammad Barkindo told "Bloomberg Markets: European Open" in an interview on Monday.
Asked if the OPEC+ deal needs to be reframed in light of the supply shortage, Barkindo said that OPEC remains focused to assure stability of supply and work to have stability in oil markets "return as quickly as possible."
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"We don't have any panic buttons in OPEC at the moment," the cartel's chief said when asked where there is an emergency OPEC meeting coming.
In case of prolonged outage in Saudi Arabia, OPEC's UAE, Kuwait, and Iraq, plus non-OPEC's Russia could bring in 800,000 bpd-900,000 bpd of production online, which is significantly less than the outage in Saudi Arabia, Warren Patterson, Head of Commodities Strategy at ING, said on Sunday.
"The issue for the market is that more than 70% of OPEC spare capacity sits in Saudi Arabia," Patterson noted.
By Tsvetana Paraskova for Oilprice.com
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