Saudi Arabia shuts down about half of its oil output: report
Weaker oil demand on the way?
The Schork Report Publisher Stephen Schork on the oil market and the future of the Saudi Aramco IPO.
Saudi Arabia is shutting down about half of its oil output after apparently coordinated drone strikes on the kingdom’s production facilities, according to a report from The Wall Street Journal.
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The hiatus will cause a loss of about 5 million barrels a day, or about 5 percent of the world’s daily crude output, the Journal reported, citing people familiar with the matter. Saudi Arabia regularly produces 9.8 million barrels a day.
Drones attacked the world's largest oil processing factory and a major oilfield operated by Saudi Aramco, the national oil company, early Saturday, sparking a massive fire. Yemen's Houthi rebels have claimed responsibility, the Journal reported.
“We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue,” a Houthi spokesman told the Journal.
The Saudi interior ministry said the fires were under control.
Now, kingdom officials are discussing lowering their oil stocks to meet demand from customers and ensure the world oil supply isn't disrupted, the Journal said.
Saudia Aramco is preparing to sell stock in a portion of its operation sometime between 2020 and 2021 in what could become the world's largest-ever IPO.
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