October 07, 2019 [TankTerminals.com] – Saudi Aramco sought to allay all fears of any production shortfall from the world’s largest producer of crude at a industry forum held in the UAE’s oil terminal city of Fujairah.
Talking at the 9th Gulf Intelligence Energy Markets Forum 2019, Ibrahim Q. Al-Buainain, president and CEO of Aramco Trading admitted that the attack on its oil installationns was a “big hit”. But Aramco was prepared to deal with this eventuality and “not one shipment was cancelled because of the attack”.
“Our contingency plan was in place. We’ve proved that Saudi Aramco is far more resilient that any other oil company in the world,” he added.
“Full production of our crude oil has been restored. In fact, we restored 50pc of our output within two days of the attack on our installations. On September 25th, we completely restored our output,” he added.
The forum saw all-round praise for the way Saudi Arabia dealt with the attack. Saudi Arabia is currently estimated to have an output of about 10mn b/d.
Neil Atkinson, head of International Energy Agency’s (IEA) oil market division, said on the sidelines of the forum that the Saudi management of the crisis situation also meant that the market did not see a spike out of control fearing a major supply disruption. He also pointed to the slack in the market that could have prevented a sudden increase in the price. For those who have watched previous market increases on geopolitical events, it was surprising that the “latest attacks only led to a peak of $71/bl”, he added.
Atkinson expected global oil demand growth to hover around 1.1 mn b/d in the current year, lower than the 1.3mn b/d in 2018 and 1.5mn b/d in 2017.
The forum saw greater concern on alertness of the market to face tougher rules on sulphur content in marine fuel by the International Maritime Organisation’s (IMO) that come into effect on 1 January, 2020.
There was assurance on the part of trading officials such as Mike Muller, director – oil business and head of trading, Vitol Asia and Keith Martin, CEO, Uniper Global Commodities, that there would be enough availability of low sulphur fuel oil in the market during the first quarter. But, shipping companies and suppliers were still voicing concerns on their preparedness.
From January 2020, the IMO will ban ships from using fuels with a sulphur content above 0.5pc, compared with 3.5pc currently.
Only ships fitted with sulphur-cleaning devices known as scrubbers will be allowed to continue burning high-sulphur bunker fuel. Ship owners can also opt for other sources of cleaner fuel such as liquefied natural gas (LNG) and 0.5pc sulphur gasoil.
Malek Azizeh, commercial director, Fujairah Oil Terminal (FOT) FZC, said the terminal has been working on blending fuel oil on “a trial and error” basis for the past four or five months and was expected to have a system in place for blending to a content of 0.5pc sulphur ahead of the 1 January deadline.
Reporter: Shibu Itty Kuttickal
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