The strike on the heartland of Saudi Arabia's oil industry, including damag...
LONDON - The strike on the heartland of Saudi Arabia’s oil industry, including damage to the world’s biggest petroleum-processing facility, has driven oil prices to their highest level in nearly four months.
The attack cut 5.7 million barrels per day of Saudi crude output, over 5 percent of the world’s supply. But the attack also constrained Saudi Arabia’s ability to use the more than 2 million bpd of spare oil production capacity it held for emergencies. Before the attack, the Organization of the Petroleum Exporting Countries global supply cushion was just over 3.21 million barrels per day , according to the International Energy Agency .
Non-OPEC members such as Russia are pumping near capacity, with perhaps only 100,000-150,000 bpd of available additional production.Iran holds spare capacity but it cannot get the oil to market because of sanctions imposed by the government of U.S. President Donald Trump.Washington has said Iran was behind Saturday’s attack, so is unlikely to ease sanctions to allow Iran to plug a gap it believes was created by Tehran.
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