Drone strikes take out half of Saudi oil capacity, 5 million barrels a day

Smoke billows from an Aramco oil facility in Abqaiq about 60km (37 miles) southwest of Dhahran in Saudi Arabia's eastern province on September 14, 2019. (Photo By AFP/Getty Images)

Drone strikes on Saudi Arabian oil facilities have disrupted about half of the kingdom’s oil capacity, or 5% of the daily global oil supply, people with knowledge of Saudi’s oil operations told CNN Business.

Yemen’s Houthi rebels on Saturday took responsibility for the attacks, saying 10 drones targeted state-owned Saudi Aramco oil facilities in Abqaiq and Khurais, according to the Houthi-run Al-Masirah news agency.

Five million barrels per day of crude production have been impacted after fires raged at the sites, one of them the world’s largest oil production facility, people with knowledge of the kingdom’s operations said. The latest OPEC figures from August 2019 put the total Saudi production at 9.8 million barrels per day.

A source told CNN Business that Aramco “hopes to have that capacity restored within days.”

The Saudi interior ministry confirmed the drone attacks caused fires at the two facilities. In a statement posted on Twitter, the ministry said the fires were under control and that authorities were investigating.

The development comes as Saudi Aramco takes steps to go public in what could be the world’s biggest IPO. Aramco attracted huge interest with its debut international bond sale in April. It commissioned an independent audit of the kingdom’s oil reserves and has started publishing earnings. Over the past two weeks, the kingdom has replaced its energy minister and the chairman of Aramco.

Saudi Arabia, the world’s largest oil exporter, has cut back on production of crude and other energy products as part of an OPEC effort to boost prices. Saudi Arabia produces approximately 10% of the total global supply of 100 million barrels per day.

The International Energy Agency said on Saturday it was monitoring the situation in Saudi Arabia. “We are in contact with Saudi authorities as well as major producer and consumer nations. For now, markets are well supplied with ample commercial stocks,” it said on Twitter.

Oil prices fell on Friday, with Brent crude, the global price benchmark slipping 0.3% to close at $60.22 per barrel.

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