Just days after shocking missile attacks forced half of Saudi Arabia’s crude production capacity offline in mid-September, energy minister Prince Abdulaziz bin Salman declared that state oil company Aramco would rise “like a phoenix from the ashes.” Saudi Arabia appears to have made good on that, with its crude output in October recovering to pre-attack volumes, according to the latest S&P Global Platts survey of OPEC production.
The kingdom pumped 9.80 million b/d in October, the survey found, leading OPEC’s total production back to 29.71 million b/d, a 1.26 million b/d rebound from its lowest level since the depths of the global financial crisis in 2009. Both Saudi Arabia’s seaborne crude exports and storage levels rose over the last month, tanker tracking services and market intelligence firms surveyed said, as Aramco has endeavored to keep its reputation as a reliable supplier intact ahead of its initial public offering of shares next month. Full production capacity of some 12 million b/d may not be restored until the end of November, Saudi officials have said.
Saudi Arabia has blamed Iran for the September 14 attacks that hit Aramco’s critical Abqaiq crude processing facility and Khurais oil field, which knocked 5.7 million b/d of Saudi production capacity offline. Iran has denied involvement. Meanwhile, Venezuela, the UAE and Libya also increased their crude output in October, according to the survey, helping offset Ecuador’s losses caused by civil unrest and falls in Angola, Iran, Iraq and Nigeria.
With production now seemingly stabilized, OPEC now turns its focus to its next meeting, December 5-6 in Vienna, when the group and its allies, including Russia, will debate the future of their collective output cuts, which are set to expire in March. Whispers of potentially deeper cuts have been dispelled in recent days by OPEC officials, including Secretary General Mohammed Barkindo, who told reporters on Wednesday that market fundamentals were looking rosier. Marine fuel sulfur regulations that go into effect January 1 and an easing of trade tensions between the US and China could be bullish catalysts.
“2020 looks like it has upside potential that will also defy some of the gloomy predictions we have seen during the course of the year,” Barkindo said at a press briefing.