Long-term effects on oil by Saudi Arabian attacks ‘highly uncertain’: EIA

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Global crude prices and Saudi Arabia’s oil production have returned to normal after the September 14 attacks, but has revealed concerns about global spare output capacity, said the US Energy Information Administration in a report.

The outage reduced OPEC’s spare crude capacity – the oil it can bring into production and sustain at short notice – by 1 million barrels per day and it will approach pre-attack levels by January 2020, the energy regulator said in its Short-Term Energy Outlook.

“The long-term effects from the disruption remain highly uncertain,” EIA said.

The attacks revealed vulnerabilities to a “significant amount of crude oil production” in a country that holds most of the spare production capacity within the Organization of the Petroleum Exporting Countries (OPEC), the regulator added.

Last month, attacks on two of Saudi Arabia’s key oil installations knocked off about 5 percent of the world’s oil supply and led to a 20 percent surge in crude prices.

The Kingdom managed to quickly revive oil supplies to its customers by tapping into its strategic reserves and is on track to regain its maximum production capacity of 12 million barrels per day by the end of November.

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