Who Can Boost Supply to Offset Saudi Attack?
(Bloomberg) -- Here is a list of countries that could boost crude production to offset losses from Saudi Arabia in the event that the disruption to supplies from the attacks on its Abqaiq and Khurais processing facilities lasts longer than initially expected. It’s not a long list and much may not be accessible.
The attacks cut Saudi production by 5.7 million barrels a day and officials at state oil company Saudi Aramco have become less optimistic on the pace of output recovery. The maximum spare capacity that could be brought into production in the coming weeks is estimated at about 3.9 million barrels a day.
That figure should be treated as an exercise in optimism, though. It includes restarting production from the Neutral Zone shared by Saudi Arabia and Kuwait, as well as tapping Saudi Arabia’s own spare capacity, much of which may also have to be processed at the Abqaiq or Khurais facilities and therefore be unusable.
August production: 9.83 million barrels a day
Production capacity: 11.5 million barrels a day
Usable spare capacity: up to 1.67 million barrels a day
On paper, Saudi Arabia has about 1.7 million barrels a day of spare production capacity, but the precise location of that reserve is unclear. If it is in the giant Ghawar, Shaybah or Khurais fields, it’s unlikely to be of any use, as crude from those fields is processed at Abqaiq.
There is some spare capacity at offshore fields, such as Manifa and Safaniyah. Offshore crude is not processed at Abqaiq, so these fields could be pressed into service.
United Arab Emirates
August production: 3.07 million barrels a day
Production capacity: 3.4 million barrels a day
Usable spare capacity: 200,000 to 330,000 barrels a day
U.A.E. output peaked at 3.27 million barrels a day in November 2018 and levels beyond that have not been tested on an on-going basis. This suggests the country could boost output by somewhere between 200,000 and 330,000 barrels a day.
August production: 2.68 million barrels a day
Production capacity: 3.15 million barrels a day
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