LONDON (Reuters) - An attack on Saudi oil facilities on Saturday is believed to have disrupted half the country’s production capacity, making the United States the only real holder of the global supply cushion via its ability to raise own output or to soften sanctions against other major oil producers.
Saudi Arabia has yet to comment on the extent of damage on its oil production but industry sources have said some 5-6 million barrels per day (bpd) or 5-6% of global supply have been affected.
Saudi Arabia, the Organization of the Petroleum Exporting Countries’ de-facto leader and largest producer, has been long seen as the custodian of the world’s spare oil capacity.
Spare capacity is the extra oil a producing country can bring onstream and sustain at short notice, providing global markets with a cushion in the event of natural disaster, conflict or any other cause of an unplanned supply outage.
Industry sources have said Saudi Arabia will be able to restore supply within days. A prolonged supply outage will have a major bullish impact on oil prices, which in turn will spur further gains in U.S. shale production.
The United States has briefly overtaken Saudi Arabia as the world largest crude exporter this year, only a few years after removing a ban on oil exports because of large needs at home as the world’s largest oil consumer.
Analysts have repeatedly underestimated U.S. output growth gains with the country now producing around 15% of global supply.
Besides the United States, the only countries which have significant spare capacity are Iran and Venezuela.
Both are subject to U.S. sanctions and have seen their exports reduced
