Global oil market reminded of supply vulnerability Report

Inform 16 September 2019

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

What’s inside this report?

The attacks on Saudi Arabia’s oil and gas sector on 14 September 2019 exposed the vulnerabilities in the global oil supply chain.

Our report unpacks the impact of these attacks on the global oil market.

Why buy this report?

Get answers to all your questions about global oil in the wake of the attacks on the world’s largest oil exporter, including:

How will this impact the supply chain and oil prices?
Can US tight oil step into the supply gap?
What lies ahead for the world’s oil markets and how could global politics influence events?

This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members. A geopolitical risk premium will return to the oil price.

Alan Gelder, VP Refining, Chemicals and Oils markets, quoted in Oilfield Technology
17 September 2019

Report summary

The dramatic 14 September night attack on Saudi Arabia’s key oil infrastructure in the Eastern Province is a sharp reminder of how tight the global supply and demand balance is. Prior to the attack, total global spare capacity was just 3.4 million bpd with most of that in the Middle East. This amount is insufficient to offset the sustained loss of 5.7 million bpd of Saudi crude oil production and 0.7 million bpd of natural gas liquids from the affected Abqaiq processing plant and Khurais field, which supply Arab Light and Extra Light grades. At a time when the world economy is already precariously tipping toward slower economic growth, the risk of sustained higher oil prices could be enough to nudge it further toward recession. For that reason, President Trump and Saudi Arabia’s Crown Prince will push hard to minimize the impact of the supply shut down. This Macro Oils Inform explores the impact on the global oil market.