Saudi Arabia, one of the most important oil exporters in the world, has long been a rock in the tumultuous oil market. Last week the Kingdom had to put all its efforts into meeting the demand for oil. Half the oil production – about 5% of the world’s supply – was shut down on Saturday 14 September when the very heart of Saudi’s oil production was hit by a drone attack.
The attack was claimed by Yemeni Houthi rebels, but the United States is pointing to Iran. The refinery is the biggest in the world and it will probably only be at the end of November that Saudi Arabia will again be able to produce its normal capacity of 12 million barrels a day.
The country has started using long disused platforms at sea again and has asked other OPEC countries to jack up their production to help meet the demand. And still, Saudi Arabia was unable to meet all its contractual commitments. Some importers were saddled with lower quality oil.
‘The energy market is nervous’
“In itself, the attack is not an economic disaster,” says oil expert Aad Correljé (Faculty of Technology, Policy and Management). “Most countries have reserves. The members of the International Energy Agency (IEA), of which most Western countries are members, have reserves of at least 90 days. The European Union even keeps reserves of 120 days. And the countries that are now getting a different quality of oil from Saudi Arabia will be able to cope by mixing it with other oil.”
“But if this case makes one thing clear, it is that it is fairly easy to cause major damage, in this case with drones. The world can see how easy it is to disrupt the oil trade and this is making the energy market nervous.”
The Netherlands is not dependent on Saudi Arabia for oil. This is also the case for the rest of Europe. The EU only gets 7% of its oil from Saudi Arabia. Russia supplies 27% and Norway is in third place with 11%. Most Saudi oil goes to Asia.
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