Here's Why The Recent Attack on Saudi Arabia's Oil Facility is Serious Business
The attack on Saudi Arabia's biggest petroleum-processing facility Abqaiq oil processing facility in Saudi Arabia last September 14 destroyed Saudi's 5.7 million barrels of crude oil supply. This generated an avalanche of events that not only crippled the country's barrels-per-day (BPD) production in half, but has also skyrocketed global oil prices to their highest level in nearly four months.
The good news here is that the Philippines isn't gravely affected by it--yet. Local oil companies like Petron Philippines and PTT Philippines assured the public of no supply disruption from their end even three days after the said incident has happened.
"Amidst this development, we would like to assure the public that we have enough supplies for the domestic consumption based on our current inventories,” PTT Philippines said. "Nonetheless, we are closely monitoring any developments in the world market if the Saudi attacks will adversely affect the stability of the supplies of crude oil."
Still, its effect on the world supply is significant. The attack cut more than five percent of the world's oil production, and forced Saudi to use up almost its entire spare to make up for the huge mishap left following the attack.
According to the International Energy Agency (IEA), the Organization of the Petroleum Exporting Countries (OPEC) petroleum reserves was around 3.21 million barrels per day prior to the attack. And of that number, Saudi's share was the biggest at 2.27 million BPD. The rest is divided between Kuwait, United Arab Emirates, Iraq, and Angola, which OPEC might use in the near future to compensate for the large hole left by Saudi Arabia.
So how long will it take before things return back to normal?
Around five months. According to Christian Malek, head of J.P. Morgan's oil and gas research for Europe, Middle East, and Africa, it would take around five months of a 5 million BPD outage for things to get "back to a 40-year normal average" once again.