By Grant Smith
That role was badly damaged by Saturday’s attack on the Abqaiq processing facility. Traders were alarmed by how easily a swarm of drones or missiles knocked out what was supposed to be the oil market’s last line of defense. As long as hostilities persist between Saudi Arabia and Iran — blamed by U.S. officials for the Abqaiq strike — there’s a chance it could happen again, according to consultants Petromatrix GmbH.
“After this weekend, we have to consider that the Saudi spare capacity is effectively non-existent as long as maximum sanctions are imposed on Iran,” said Olivier Jakob, managing director at the firm. Tehran has denied involvement in the attack.
Even as the kingdom promised on Tuesday to keep oil exports flowing as normal, it acknowledged that its supply buffer for the next two months will be at half normal levels. Total production capacity will rise to 11 million barrels a day this month, and then full levels of 12 million by the end of November, said Energy Minister Prince Abdulaziz bin Salman.
Even then, Riyadh will need to reckon with the possibility that the world won’t have the same degree of faith in its guardianship.