Oil prices and output in Saudi Arabia may have recovered from the impacts of the September 14 attack on Saudi Aramco’s Abqaiq facility relatively quickly, but it opened up new concerns about the fragility of global spare production capacity, the US Energy Information Administration said Tuesday. “The long-term effects from the disruption remain highly uncertain,” EIA said in its monthly Short-Term Energy Outlook. “The attack revealed vulnerabilities to a significant amount of crude oil production in a country that holds most of the spare production capacity within [OPEC].”
The attack, which disrupted an estimated 5% of global liquid fuels supply, caused OPEC spare crude capacity to fall to 1.23 million b/d in September from about 2.23 million b/d in August, EIA said. EIA forecasts OPEC spare capacity to return above 2 million b/d by January. Saudi oil production fell to 8.5 million b/d last month from 9.85 million b/d in August due to the attack. EIA estimates Saudi crude oil output returned to pre-outage levels as of October 3.
The attack, along with falling production in Venezuela and Iran, meant OPEC oil output averaged 28.23 million b/d in September, down 1.55 million b/d from August and the lowest level for OPEC production since November 2003, EIA said. The latest S&P Global Platts survey estimates OPEC production averaged 28.45 million b/d in September, down 1.48 million b/d from August.
OPEC crude output in September fell nearly 4 million b/d year on year, EIA said. EIA estimates OPEC output will average 29.83 million b/d in 2019, down 2.1 million b/d from 2018, and fall to 29.62 million b/d in 2020. Oil production in Venezuela fell to 650,000 b/d in September, down 100,000 b/d from August and less than half of what the country was producing a year ago. Iranian oil production average 2.1 million b/d in September, where it has been since July, EIA said.