Saudi Arabia’s lost oil production accounts for 5% of global supply

lost oil production

Naser Al-Tibi, an energy specialist, described the Aramco plant in Abqaiq province, which was hit by terrorist attacks at dawn on Saturday, as the “beating heart” not only of Saudi oil facilities but of the Saudi oil and gas system, saying: “We are talking not only about a plant or a facility, but a complex that includes a number of concentration units through which oil and gas are collected, and also promotes the extraction of natural gas liquids”.

“Most of Saudi production goes through Abqaiq before it is processed there. It is either shipped to export points on the Arabian Gulf or the Red Sea coast, or used internally for storage, petrochemical facilities, and refineries,” Al-Tibi continued.

“It is a very important complex and a big event, we are talking about 5.7 million barrels of the 9.8 million barrels produced in Saudi Arabia during the month of August, according to “secondary” sources,” Al-Tibi added.

On the other hand, he pointed out that the stalled supplies constitute 5% of global supplies, so it would not be surprising that oil prices jumped between $2 to $3 at the opening next morning.

Therefore, the oil market will return to enter the price premium as a result of the security risks in the region, unlike the previous period where the market was not adequately assess the security and geopolitical risks, especially as this incident is not the first of its kind after the continuous attacks on oil tankers and facilities in the recent period.

But Al-Tibi went on to point out that oil markets still focus on a surplus in supply as well as the weakness of the global economy and what is happening specifically in the US-China trade war.