Saudi oil production cut by 50% after drones attack crude facilities

[Pauls' Revere]

I think I'm going to turn on the radio and hear about a massive cyber attack on Iran that mysteriously cannot be traced.

 

[UWDude]

I think I'm going to turn on the radio and hear about a massive cyber attack on Iran that mysteriously cannot be traced.

MSM says Israel's elections are going to be cyber attacked, according to sources familiar with the terrorists' thinking.

 

[Pauls' Revere]

MSM says Israel's elections are going to be cyber attacked, according to sources familiar with the terrorists' thinking.

Wait and see. If they are and right after this Aramco site geez.

 

[UWDude]

Wait and see. If they are and right after this Aramco site geez.

If the Houthis pulled off some shit like that, I'd want to marry them and have their babies.

 

[Swordsmyth]

Saudi Aramco has offered Indian Oil Corp Arab Heavy crude oil instead of Arab Light following an attack on its oil facilities over the weekend, an industry source told Reuters on Tuesday.IOC will receive full allocated volumes from Saudi Aramco in September and October, the source said, declining to be named as he was not authorised to speak with the media.

However Aramco has said they would give some volumes of Arab heavy instead of Arab mix oil, the source added. This indicates that Saudi is offering heavy grade instead of light as Arab Mix is a combination of Arab light and heavy.
No immediate comment was available from IOC.

https://finance.yahoo.com/news/saudi-aramco-offers-alternative-crude-074828569.html

 

[Swordsmyth]

Saudi Arabia has approached Baghdad with a request to buy crude oil from OPEC’s number-two to compensate for its production outage caused by the Saturday attacks, sources who declined to be named told S&P Global Platts.
According to one of the sources, Aramco had asked Iraq’s State Oil Marketing Organization, or SOMO, for some 10 million barrels of Basra Light, to load in October and November.


Saudi Arabia’s crude oil in storage was about 180 million barrels in July, which would have been enough to cover exports at the rate of 6.88 million bpd for a period of almost a month.
Now, the S&P Global Platts sources say Riyadh is also planning to use some of the oil it had allocated for domestic consumption to fulfill its export obligations. Iraq, in the meantime, has yet to respond to the request as it has its own export orders to fill.

More at: https://oilprice.com/Latest-Energy-News/World-News/Saudi-Arabia-Asks-Iraq-For-Oil.html

 

[Swordsmyth]

The attacks on Saudi soil with drones and ballistic missiles will stop, the Houthis have vowed, if Saudi Arabia will stop its airstrikes over Yemen, according to Bloomberg, who quoted Yemen Shiite Houthi rebel leader Mahdi al-Mashat, who spoke on Al Masirah TV.

The Iran-backed Houthis have claimed ownership of the devastating attacks that crippled Saudi Arabia’s oil infrastructure over the weekend that took offline 5.7 million barrels per day—which is half of Saudi Arabia’s total oil production--sending oil prices sharply upward.

More at: https://oilprice.com/Latest-Energy-...-If-Kingdom-Agrees-To-Stand-Down-In-Yeme.html

 

[Swordsmyth]

Much of the attention concerning the crippling damage to Saudi Aramco facilities struck in last week's aerial attack ultimately blamed on "Iranian sponsorship" by US and Saudi officials has focused on Abqaiq processing plant, but on Friday the first on the ground images from the kingdom's giant Khurais oil field — the country's second largest — have been revealed, showing scorched infrastructure, ruptured pipelines, and "a mess of oil melted to asphalt, twisted and charred metal grates" according to an on site Bloomberg report.

And yet Aramco has remained insistent that the field will return to pre-attack output levels this month, after the company reported losing half its daily output in the aftermath of the early Saturday attacks, impacting a whopping 5% of total global supply.

Per Bloomberg, Khurais has a capacity of 1.45 million barrels a day, processing all oil on site; however the attack took out four 300-foot towers essential to the production process.

​

Like at the Abqaiq processing plant nearer the coast, the strikes — whether by drones or ballistic missiles (debris showed by the Saudi Defense Ministry this week featured both) — appeared remarkably precise.
The Saudis have counted a total of twenty-five drones and missiles used in the twin attacks, after statements by Yemen's Houthi rebels claimed ten drones were used.

CNBC: RT @CNBCi: Abqaiq, the world’s largest oil facility, was attacked in 18 different locations on Saturday, CNBC's @_HadleyGamble is on the ground at Saudi Aramco's facilities. https://t.co/vcgOhkE03m pic.twitter.com/qEJd6QZOtz
— Paul M Smith BA Hons (@paulmsmith1975) September 20, 2019​

Bloomberg reports of the recovery progress at Khurais:

The Khurais field and processing plant resumed 30% of production within 24 hours of the strike and will produce 1.2 million barrels a day by the end of September, Fahad Al Abdulkareem, general manager for Aramco’s southern area oil operations, said at a briefing on Friday. Workers are at the site 24 hours a day to speed the repairs, according to the company.
​

The precision nature of the strikes, which Washington has claimed can only point to Iranian involvement given the level of sophistication needed to conduct such an operation, is even more evident at the Abqaiq facility.

Images released via the #Saudi Press Agency from the Defense Ministry briefing earlier show the first images of up close damage from the #Abqaiq #Aramco attack. pic.twitter.com/CLFQ7Pfh1A
— Aurora Intel (@AuroraIntel) September 18, 2019​

Given the sheer distance the drones would have to travel, whether from Yemen or possibly Iran, combined with 18 precision strikes on the 70-year old but state of the art Abqaiq facility, a number of analysts are questioning whether the operation had inside the kingdom help.

Bill Blain of Shard Capital is one of them, who notes "a number of my sources suggest things look increasingly questionable in the desert kingdom."
Blain comments:

Looking at the photos of the Houthi drone strikes, the damage and the holes made in the gas tanks look suspiciously regular and well placed. MBS’s shakedown of his royal cousins and the nation’s business leaders stands alongside rising revulsion at his own spending. As defacto absolute ruler he feels above question, but domestic tensions are rising. More than a few analysts suspect the Houthis may have had inside assistance for a growing Saudi domestic insurgency.
​

"Trump and Kushner are going to struggle with that one.." he concluded.

Indeed, considering the kingdom's historically restive Shia community in the eastern part of the country would also avail itself to help any operation intent on striking sensitive state facilities, the possibilities are endless.

https://www.zerohedge.com/energy/first-images-crippling-damage-giant-khurais-oil-field-revealed

 

[Pauls' Revere]

https://www.nbcnews.com/politics/po...ces-saudi-arabia-after-drone-attacks-n1057216

Sept. 20, 2019, 4:50 PM PDT / Updated Sept. 20, 2019, 6:59 PM PDT
By Mosheh Gains and Dennis Romero
The United States is deploying military forces to the Middle East after Saturday's drone attacks on major oil sites in Saudi Arabia that the administration of President Donald Trump has blamed on Iran.
"The president has approved the deployment of U.S. forces which will be defensive in nature and primarily focused on air and missile defense," U.S. Secretary of Defense Mark Esper said at a news conference Friday.

Answering reporters' questions about the deployment, Gen. Joseph F. Dunford Jr., chairman of the Joint Chiefs of Staff, described the troop deployment as "modest" and "not thousands."
Dunford said he planned to confer with U.S. Central Command and Saudi officials to work out details of the deployment, which he said would be announced next week.

 

[Swordsmyth]

Saudi state oil firm Aramco has told Japanese refiner JXTG Nippon Oil & Energy about a possible change in shipment, raising concern about the kingdom's ability to supply crude oil a week after attacks on its refineries, the Nikkei Asian Review reported.Aramco did not specify a reason for the change in oil grade supplied to Japan's biggest refiner from light to heavy and medium starting October, Nikkei said https://s.nikkei.com/2kVAbFR, citing JXTG officials.
JXTG officials suspect that Aramco is taking more time than expected to fix its desulfurization facility, which is necessary to produce light-grade crude used in the production of gasoline and light gas oil, the newspaper said.
At least three supertankers that loaded crude in Saudi Arabia this week for China and India had their crude grades switched from light to heavy oil while more buyers in Asia have been asked to delay shipments and switch grades in September and October, Reuters reported, citing sources and data from Refinitiv and Kpler.

More at: https://news.yahoo.com/saudi-arabia-...031202120.html

 

[Swordsmyth]

While S&P futures may spike at the open following Saturday's news from the NYT that the "the delegation of Chinese agriculture officials that had planned to travel to Montana and Nebraska in the coming week didn’t cancel the trip because of any new difficulty in the trade talks" but "instead, the trip was canceled out of concern that it would turn into a media circus and give the misimpression that China was trying to meddle in American domestic politics", oil too is likely to catch a bid after the WSJ reported that it may take "up to eight month", rather than 10 weeks company executives had previously promised, to fully restore operations at Aramco damaged Abqaiq facility, suggesting the crude oil shortfall will last far longer than originally expected.

Saudi officials say there is little sense of calm at the highest levels of the company and the Saudi government, however. It could take some contractors up to a year to manufacture, deliver and install made-to-measure parts and equipment, the Saudi officials said. #OOTT https://t.co/dtUzWlem9c
— Summer Said (@summer_said) September 22, 2019​

The official reason for the delay: the supply-chain is unable to respond to the Saudi needs. Specifically, Aramco is" in emergency talks with equipment makers and service providers, offering to pay premium rates for parts and repair work as it attempts a speedy recovery from missile attacks on its largest oil-processing facilities."

​

Following a devastating attack on its largest oil-processing facility more than a week ago, Aramco is asking contractors to name their price for patch-ups and restorations. In recent days, company executives have bombarded contractors, including General Electric , with phone calls, faxes and emails seeking emergency assistance, according to Saudi officials and oil-services suppliers in the kingdom.
​

"One Saudi official said costs could run in the hundreds of millions of dollars", the WSJ reported.


The bottom line: the extent of the damage means a return to normal operations at Abqaiq could take up to eight months, said some Saudi officials. Most technical experts who have seen the destruction firsthand said they share that view.

“Repairing the damaged units will take time, anywhere from two to nine months depending on the damage, even if Aramco had contingencies in place and spare tailor-made equipment,” said IHS Markit in a note.
​

So what does it mean for the oil price if millions of barrels of oil in daily output will be delayed from coming back to market? Covneniently, SocGen had a report discussing just that scenario on Friday, in which it said that "if production recovery is delayed (or we have any other supply disruptions), prices do not decline, they rise toward $70/bbl on average. This is a very conservative view based on the simple linear regression shown below on the right. Typically, when time spreads are at the levels we would forecast, the observed flat price does not sit on the regression line. The cluster is above the line and corresponds with prices approaching something more like $75/bbl (red circle)."

In other words, at least $10/barrel upside from here from a mere production delay, is quite likely.
* * *
But that's only in the short to medium term: here SocGen warns that in the longer-term "the higher the price goes, the harder it will fall" and explains:

Energy and oil use per unit of real GDP in the West has been in a steady decline of course. However, the risk remains that a price spike may contribute to both softening GDP and oil demand in the new demand centres (East), and to politicians’ renewed determination to speed up the energy transition away from fossil fuels. The oil majors will not suddenly abandon capital discipline, though they will benefit from the temporary margin and free cash flow expansion of a spike. But the higher the price goes, the harder it will fall. There are many precedents of previous supply shocks reviewed in brief on the next page. Historically, sharp disruptions and oil price spikes drive subsequent oil demand and GDP weakness. It is then just a question of the degree of a country’s GDP sensitivity to oil prices (manufacturing versus service economies) as to how serious that economic impact is. The US is more balanced nowadays between its large consuming sector and a large shale liquids producing sector. But the main drivers of global oil demand growth in the East (China, Japan et al.) will suffer negative effects from higher oil price.
​

The only question for Saudi Arabia is whether it can pull of the Aramco IPO in time, while Brent prices are still high, and before the "longer-run" arrives.

More at: https://www.zerohedge.com/commoditi...rt-saudi-repairs-abqaiq-may-take-eight-months

 

[Pauls' Revere]

https://www.msn.com/en-us/news/worl...ay-someone-else-to/ar-AAHG0DU?ocid=spartanntp

It is baffling, in the light of last week’s attacks on two Saudi oil facilities, that there is so much speculation about Saudi and Iran going to war. Saudi does not “go to war”: it hires proxies, and depends on US gullibility to continue the lie that it is the regional peacekeeper, and that any threat to the country destabilises the region. The US and Saudi Arabia have repeatedly accused Iran of being behind the attacks, which were claimed by Yemen’s Houthi movement, a group aligned with Iran and fighting the Saudi-led alliance in Yemen’s civil war. The Pentagon has announced that it will be sending hundreds of US troops, in addition to air and missile defence equipment, to Saudi Arabia as a “defensive” move.
Why does a country that was the world’s largest arms importer from 2014 to 2018, according to a report by the Stockholm International Peace Research Institute, need so much help?
In 2018, the US provided 88% of all weaponry sold to the country. By the end of 2018, Saudi was responsible for 12% of global arms purchases. It is clearly not in need of more military kit from the US to defend it against drone attacks.
What, then, does a country that is involved in one military campaign, in Yemen, and which appears so vulnerable to attack and in need of constant protection, do with so many weapons? Buying the weapons, rather than deploying them, is the point. These multimillion-dollar purchases maintain commercial relations with western allies from whom it imports arms, and who in return turn a blind eye to Saudi’s human rights abuses, assassinations and kidnappings, because there is too much money at stake. Saudi Arabia’s entire foreign policy model is based on using its wealth to buy friends and silence.

And so Saudi must continue to play on US fears about Iran, ensuring that its bodyguard is always “locked and loaded”, as Trump stated in a sabre-rattling tweet after the drone strikes. At the same time, Saudi continues to destabilise the region by meddling in the internal affairs of other Arab countries, passing on arms to other dictatorships in the Middle East and North Africa, and launching aggressive social media intimidation and disinformation campaigns. Even Twitter clamped down on Saudi accounts last week. And still the country is perceived to be a vulnerable innocent, a bulwark against chaos in the Middle East.
Bellicose in the extreme, and yet aware that it is highly unlikely to suffer the consequences of its pugnaciousness, Saudi is currently locked in escalating conflicts with Iran, Qatar and Yemen, propping up military regimes in Sudan and Egypt, messily meddling in Lebanon, and continuing to fund random Sunni hardline endeavours all over the world – and generally getting away with it. Saudi will not go to war with Iran, but the US may do so on its behalf. Meanwhile, Saudi looks on – as ever, the indulged and unpunished provocateur of the Middle East.

 

[UWDude]

Well, with all that chatter, everybody is missing the explosive story out of all of this:

Saudi Arabia has over 70 Patriot batteries on its northern border alone.
What a failure of an anti-missile system that has shown far more failure than success.

The only people left buying this patriot garbage are the PATRIOT Actors, their masses, and half of the world's masses.
Trump is selling them more. More worthless ADS.
Patriots can hit aircraft, sure, but missiles even PAC3 seems to suffer and fail against.
Could be an entire world network of this garbage.

Putin trolled hard, recommended Saudi Arabia consider buying some old S-300s. Their record is way better.

As I have mentioned before, a fatal flaw in NATO strategy was shifting focus to iron hand in velvet glove military operations, aka colonization aka imperial conquest. To not destroy what they seek to seize. Actual big war may have been war gamed, but experience was non existent. In the meantime, those in the way of NATO, and their allies, got much real world practice with resisting missile strikes.
(Israel is about the only NATO aligned country that has gotten tons of missile defense practice. But most of the missiles fired at Israel have been with poor navigation systems, making them fairly inaccurate. Way, way cheaper to let them hit then spend a Patriot Missile. Also martyr propaganda power. Crying out in pain.)

It's actually terrifying how poor American anti-missile batteries have performed.
What is more terrifying is this all may be propaganda, meant to draw the two countries towards the next great "purification" of man.
Lots of glowing green.
American Military Intelligence KNOWS the actual statistical realities, as does Russian Military Intelligence.
They could never give each other straight answers, and poison their propaganda as well.

I can confirm however, by surveying mutually affirmed propaganda, Patriots suck.

Go Hawks.

 

[Swordsmyth]

Well, with all that chatter, everybody is missing the explosive story out of all of this:

Saudi Arabia has over 70 Patriot batteries on its northern border alone.
What a failure of an anti-missile system that has shown far more failure than success.

The only people left buying this patriot garbage are the PATRIOT Actors, their masses, and half of the world's masses.
Trump is selling them more. More worthless ADS.
Patriots can hit aircraft, sure, but missiles even PAC3 seems to suffer and fail against.
Could be an entire world network of this garbage.

Putin trolled hard, recommended Saudi Arabia consider buying some old S-300s. Their record is way better.

As I have mentioned before, a fatal flaw in NATO strategy was shifting focus to iron hand in velvet glove military operations, aka colonization aka imperial conquest. To not destroy what they seek to seize. Actual big war may have been war gamed, but experience was non existent. In the meantime, those in the way of NATO, and their allies, got much real world practice with resisting missile strikes.
(Israel is about the only NATO aligned country that has gotten tons of missile defense practice. But most of the missiles fired at Israel have been with poor navigation systems, making them fairly inaccurate. Way, way cheaper to let them hit then spend a Patriot Missile. Also martyr propaganda power. Crying out in pain.)

It's actually terrifying how poor American anti-missile batteries have performed.
What is more terrifying is this all may be propaganda, meant to draw the two countries towards the next great "purification" of man.
Lots of glowing green.
American Military Intelligence KNOWS the actual statistical realities, as does Russian Military Intelligence.
They could never give each other straight answers, and poison their propaganda as well.

I can confirm however, by surveying mutually affirmed propaganda, Patriots suck.

Go Hawks.

Maybe they sell a different version to some countries and they want the enemy to think they don't work well.

 

[Swordsmyth]

IF this is true the odds of an inside job go WAY up:



Saudi Aramco has restored Saudi Arabia’s oil production capacity to 11.3 million bpd—the level before the attacks on oil facilities ten days ago, Reuters reported on Wednesday, citing three sources with knowledge of the Kingdom’s oil company’s operations.
Separately, people familiar with the situation at Aramco told Bloomberg on Wednesday that Saudi Arabia is recovering from the September 14 attacks faster than expected—about a week faster than Saudi officials have given as a date to recover the full capacity, the end of September.

Despite continued reports that the Saudis would struggle to restore oil supply by the end of this month as they had promised and that repairs would likely take months rather than weeks, a source told Reuters on Monday that the Kingdom would fully restore by early next week the oil production lost in the attacks.
As of Monday, Saudi Arabia was said to have restored 75 percent of the production lost in the attacks. Output at the Khurais oil field was more than 1.3 million bpd as of Monday, while production from Abqaiq stood at around 3 million bpd.

According Reuters’ sources today, production at the Abqaiq plant is around 4.9 million bpd now.

More at: https://oilprice.com/Energy/Crude-O...Production-Capacity-To-Pre-Attack-Levels.html