Russia’s Energy Minister: Global Oil Stocks Can Cover Saudi Supply Gap

Global commercial oil inventories will be enough to cover a potential deficit on the oil market following the attacks on key oil infrastructure in Saudi Arabia, Russian Energy Minister Alexander Novak told reporters on Monday.

On Saturday, the Abqaiq facility and the Khurais oil field in Saudi Arabia were hit by attacks, which resulted in the temporary suspension of 5.7 million bpd of Saudi Arabia’s crude oil production, or around 5 percent of global daily oil supply.

Asked whether Russia needs to boost its oil production to offset the Saudi loss, Novak told reporters, as carried by RIA Novosti, that it would all depend on the Saudi assessment of the consequences of the attack. The assessment will show the extent of the impact on Saudi oil production and deliveries, the Russian minister said.

“There are enough commercial inventories in the world right now to cover a shortage in the medium term,” Novak said, noting that a lot would depend on how long the Saudi infrastructure would be offline.

Commenting on the attacks in Saudi Arabia, the International Energy Agency (IEA) said on Saturday:

“We are in contact with the Saudi authorities as well as major producer and consumer nations. For now, markets are well supplied with ample commercial stocks.”

OPEC has sufficient spare capacity to respond to supply shortages after the attacks on oil infrastructure that took more than half of Saudi Arabia’s crude oil production offline, Suhail Al Mazrouei, the energy minister of the United Arab Emirates (UAE), said on Monday.

Still, the UAE energy minister, as well as OPEC’s Secretary General Mohammad Barkindo, said it was too early to rush into emergency OPEC meetings and put extra supply on the market, at least until Saudi Aramco provides the first updates about how long it would take to restore the lost production.

By Tsvetana Paraskova for Oilprice.com