And there it is, moments before oil markets open: upon the US release of declassified satellite images showing precision strikes on critical spheroids at the world’s largest oil processing facility at Abqaiq one market analyst alarmingly writes,
“We think this is a months fix, not days/weeks. Oil going up even higher.”
This after reports just before the satellite photos were released commonly said a minimum of “weeks” would pass before full Saudi Aramco production capacity comes back online.
On a first look, it count at least five spheroids hit, and probably five stabilisation towers too (out of 18). It’s quite amazing the precision of the hits on the spheroids | #OOTT
— Javier Blas (@JavierBlas) September 15, 2019
They appear to show approximately 17 points of impact on key infrastructure at the site after Yemeni Houthis claimed a successful drone strike of up to ten unmanned aerial vehicles with explosives.
However, US and Saudi officials, still amid an ongoing investigation, have told reporters they are “certain” the attack actually originated from Iraq, especially as the debris and precision targeting show a level of “sophistication” which would link it to Iran’s elite IRGC.
Dan Tsubouchi, chief market strategist at Calgary-based SAF Group, is predicting a fix that will take months based on the extent of the damage revealed in the new images, driving up oil to prices beyond the initial possibly short-sighted predictions this weekend.
According to Fox News:
The Washington-based Center for Strategic and International Studies in August had identified that region as the plant’s stabilization area. That zone included “storage tanks and processing and compressor trains — which greatly increases the likelihood of a strike successfully disrupting or destroying its operations,” the center wrote at the time.
Niether Riyadh officials nor the state-run oil giant Saudi Aramco have yet to confirm the extent of the damage, but have only made assurances they will tap its global reserves network.
Aramco’s president and CEO Amin Nasser announced Sunday, “Work is underway to restore production and a progress update will be provided in around 48 hours.”
Source: Zero Hedge