OPEC’s oil production has slumped to the lowest level since 2011 following attacks on the heart of Saudi Arabia’s oil industry, new data shows.
The 14-member organization’s monthly total in September was down 750,000 barrels per day (bpd) from August, Reuters reported.
A brazen attack by Yemeni forces last month shut down 5.7 million bpd of Saudi Arabia’s oil production, which represents more than half of the kingdom’s or five percent of global output.
It sent crude prices up 20% to $72 a barrel and exposed the vulnerability of the world’s largest oil exporter to a new situation.
Energy analysts have said the raid was akin to a massive heart attack for the oil market and global economy.
The global oil market is already tight because of unilateral US sanctions on Iran and Venezuela. In September, Saudi Arabia supplied 9.05 million bpd or 700,000 bpd less than in August, according to Reuters.
However, the drop was larger which state oil company Aramco limited by releasing stored crude from its inventories, the news agency said.
On Monday, Fitch Ratings cut down Saudi Arabia’s debt rating by a notch, citing vulnerabilities in the kingdom’s economic infrastructure.
The New York-based rating agency downgraded the kingdom’s long-term foreign currency issuer default rating to A from A+.
The downgrade drew immediate rebuke from the kingdom, saying Fitch should have taken the country’s “outstanding capacity to effectively deal with adversities” into account.
While the pre-dawn attacks on September 14 hit two of Aramco’s largest oil facilities, Abqaiq and Khurais, Saudi Arabia has claimed quick recovery, saying it has already restored or substituted its lost production.
According to Saudi officials, oil production was restored fully by end-September. However, energy observers believe the country is using inventories to show limited impact.
Reuters on Monday put Saudi production at about 8.5 million bpd. Meanwhile, Fitch said it believes there is a risk of further attacks on Saudi Arabia, which could result in economic damage.
Saudi Arabia's Crown Prince Mohammad bin Salman said in an interview aired Sunday that a serious escalation would devastate the global economy.
"The region represents about 30 percent of the world's energy supplies, about 20 percent of global trade passages, about four percent of the world GDP. Imagine all of these three things stop," he told the CBS program "60 Minutes."
"This means a total collapse of the global economy, and not just Saudi Arabia or the Middle East countries."
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