Crippling Oil Attacks Jolt Saudi Economy Burdened by OPEC Curbs
Added 09-18-19 06:04:02am EST - “(Bloomberg) -- The attack on Saudi Arabia's oil production could rip through an economy whose vulnerabilities were already laid bare by output curbs negotiated by OPEC.Growth in the kingdom, where the oil and gas sector accounts for…” - Finance.yahoo.com
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(Bloomberg) -- The attack on Saudi Arabia’s oil production could rip through an economy whose vulnerabilities were already laid bare by output curbs negotiated by OPEC.
Growth in the kingdom, where the oil and gas sector accounts for about 50% of gross domestic product, was on track to slow to 1.9% this year even as the non-oil economy showed signs of revival, according to the International Monetary Fund. Public finances were enough of a worry that the IMF was calling for a tighter fiscal policy to safeguard the country’s budget.
The Saudi economy “has been in a prolonged state of stagnation since 2014,” when it succumbed to a crash in oil prices, said Marcus Chenevix, an analyst at investment research firm TS Lombard in London. “To have this come just at the moment when some green shoots are starting to emerge must be profoundly frustrating.”
If the halt caused by the weekend strikes on the Abqaiq crude processing plant -- which handles 5.7 million barrels of oil a day, or about half of Saudi production -- lasts until the end of 2019, it would slash GDP in the fourth quarter by more than 20% from a year earlier, according to Capital Economics.
Aramco’s Chief Executive Officer Amin Nasser said daily production should return to pre-attack levels of about 4.9 million barrels by the end of September A full recovery is expected in 10 days, according to Crown Prince Mohammed bin Salman.
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