Half of Saudi oil output offline after drone strikes


Drone strikes on the heart of the Saudi oil industry forced the kingdom to shut down half its crude production on Saturday, amounting to a loss of about 5M barrels a day, or roughly 5% of the world’s daily production of crude oil, WSJ reports.

Yemen’s Iranian-aligned Houthi rebels claimed credit for the attack, saying they sent 10 drones to strike at important Aramco (ARMCO) facilities, including the world’s largest oil processing plant and a major oil field.

Crude prices will be on watch when trading reopens on Sunday evening.

Update: The production cut was taken as a precautionary measure, but most output will be restored with 48 hours, sources told Reuters, asking to not to identified before an official announcement.

Go deeper: While an oil price increase could benefit Aramco’s upcoming IPO, if the Saudis can’t turn production back on quickly, it could rattle investor confidence in the kingdom’s national oil company.

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