Bloomberg is reporting that Saudi Aramco has restored oil production levels at the crude-processing plants at Abqaiq and at the Khurais oil field. Multiple reports that Saudi’s production would be back online quickly have helped push oil prices back down to where they were prior to the September 14 attacks.
Maximum production capacity still isn’t at pre-attack levels, and Aramco said that won’t be restored until late-November. Presently, Abqaiq capacity has been restored to 4.9 million barrels a day (BPD), versus a pre-attack capacity of 5.5 million BPD. Khurais is operating at 1.3 million BPD, versus a pre-attack capacity of 1.5 million BPD.
Aramco has reportedly continued to supply its customers, in part by drawing down its oil inventories. The inventory draw has been reported upon by Ursa, a geospatial intelligence company. I recently spoke with Ursa’s global energy analyst, Geoff Craig, who explained the company’s capabilities and findings.
Ursa measures tank levels from space using Synthetic Aperture Radar (SAR) satellites. The data is then processed with a machine learning algorithm. The company also reports on flaring activity. These two pieces of information can provide a picture of Saudi Aramco’s activities.
Geoff explained that three sites — Ras Tanura, Yanbu and Khafji — contain most of Saudi Arabia’s domestic crude oil inventories. In the month prior to the attack, inventories were relatively stable. But the two weeks following the attacks saw inventories at these three sites fall by more than 20%.
In addition to drawing down inventories Aramco has reportedly been sourcing crude oil from nearby countries like Kuwait, and it has been offering some customers heavy crude instead of the light crude they normally receive.