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Saudi oil field attack- Supply chain impact

Thursday 19 September 2019

In the wake of attacks on oil field in Saudi Arabia, Dr Jonathan Owens of the University of Salford Business School comments on possible impacts.

Dr Owens said: “The drone attack on the Abqaiq oil-processing facility has reduced output to approximately 5.7 million barrels a day in production. However, reports that Saudi should be able to restore about one-third of that by the end of early this week, predominantly coming from stored oil reserves from different facilities within their supply chain.  
“There is claim from Saudi sources that most of the production will be back to normal in the coming days, however what is evident from media pictures is the processing plant sustained some significant damage and getting it fully operational and linking up with the supply chain could take at least weeks rather than days.  
“This is probably the expectation of the US administration particularly as Trump has authorised the released of oil from the US Strategic Petroleum Reserve, in order to shore up and offer stability to the US supply.  
“There is a certain amount of volatility in the direct supply what is evident is prices at the pumps will now be dictated due this and the use of the reserve supply.”

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Sam Wood

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