Saudi Arabia’s state oil company Aramco plans to bring back its full crude output by the end of September, potentially capping gains on any further supply-side support for oil-related exchange traded funds.
The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, are still 6.3% and 8.6% higher, respectively, over the past week after an attack on Saudi Arabia’s oil facilities stopped 5% of the world’s crude oil supply.
However, the short-term supply disruption may end sooner than many expect. Fahad Abdulkarim, Aramco’s general manager for the southern area oil operation, said Aramco is already shipping equipment from the United States and Europe to rebuild the damaged facilities, Reuters reports.
“We are working 24/7,” Abdulkarim said in Khurais. “This is a beehive.”
Khalid Buraik, Saudi Aramco vice-president for southern area oil operations, said 15 towers and facilities were damaged at Abqaiq, but he was reassured that they will be up and running at full output capacity by the end of September.
“We are confident we are going back to the full production we were at before the attack (on Khurais) by the end of September,” Abdulkarim added.
According to the Saudi defense ministry, Aramco facilities were hit by 18 drones and three missiles. The attacks cut production from the world’s largest crude exporter by half, shutting down 5.7 million barrels per day.
Nevertheless, about 2 million barrels per day of production have been brought back online at Abqiaq and 30% of Khurais’s output.
Riyadh is trying to build a credible case against Iran for the attacks, and investigations are ongoing, the Wall Street Journal reports. The Saudi government has the United Nations to hold Iran responsible for the aggressive moves in the region, arguing that the attacks were an “assault on the international community.”
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