The Abqaiq facility is the largest crude oil stabilization plant in the world which processes more than 7 million bpd of crude.
“Considering the plant plays a vital role in removing the sulphur impurities and reducing the vapor pressure of the crude in order to make it safe for being transported by tankers, exports from the Kingdom’s main terminals of Ras Tanura and Juaymah could be expected to have an impact, if there is an extended delay in bringing the facility back into operation,” Ranjith Raja, lead analyst, oil research said.
"This is already seen in the number of ships that have lined up at the port’s waiting anchorage, which have increased from just 5 ships waiting to load on Thursday (12th Sept) as per the port line up to at least 16 VLCC’s waiting as of this morning (15th Sept 2019)," Refinitiv noted in its report.
Aramco President and CEO Amin Nasser said work is underway to restore production and a progressive update will be provided in around 48 hours.
Refinitiv Oil Research was initially informed by port agents that according to the instruction received from Aramco OSPAS (Oil Supply, Planning and Scheduling) the vessels at anchorage are still on-hold until further notice. However, OSPAS on Sunday lifted the hold on the ships at anchorage and a berthing plan is expected to be followed. Ships can be seen moving to the berth now, Refinitiv reported.
Refinitiv data indicate a year-to-date average of 6.29 million bpd departing from Ras Tanura – this is more than 3 VLCC departures every day from the port.
"Comparing that to the present line up of ships at the berth, there is expected to be a sharp drop in exports this week. Although the attacks might not have an immediate impact on the crude production, there will certainly be an impact to the exports from the kingdom if there is an extended delay in bringing the processing plants back in operation," Ranjith said.
Major petrochemical companies in Saudi Arabia announced a curtailment of feedstock supplies, as they are currently working on evaluating the financial impact due to Saturday’s drone attacks on Aramco sites.
However, the impact of this attack on oil prices remain unknown. Considering the attack was over the weekend, any information or updates on the extent of damage would determine the reaction of the market when they open on Monday.
The International Energy Agency (IEA) said on Saturday that the global oil markets are for now “well supplied with ample commercial stocks.”
The US Department of Energy said it’s prepared to dip into the Strategic Petroleum Oil Reserves if necessary to offset any market disruption.
(Writing by Seban Scaria firstname.lastname@example.org , editing by Daniel Luiz)
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