Saudi Aramco reducing output at two oilfields: sources
The specific fields affected and the extent of curtailed production are not immediately clear
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[RIYADH] Saudi oil giant Aramco has begun cutting output at two of its oilfields, two sources said on Monday (Mar 9), after the vital Strait of Hormuz was choked by the US-Israel war on Iran and subsequent attacks on the waterway.
The specific fields affected and the extent of production that was curtailed were not immediately clear. The company, which has been rerouting some of its crude cargoes to the Red Sea port of Yanbu, declined to comment.
The reductions by the world’s top oil exporter underscore the severe logistical bottlenecks in the region since the US and Israel began attacking Iran on Feb 28.
Teheran responded by launching hundreds of missiles and drones, also targeting Gulf countries hosting US military facilities.
Several of Saudi Arabia’s neighbours have also cut production – as shipping in the oil transit chokepoint, carrying roughly a fifth of global oil and liquefied natural gas (LNG) flows, has ground to a near halt.
Kuwait Petroleum Corporation has reduced oil output and declared force majeure on shipments, while Qatar halted LNG production at its massive Ras Laffan export hub following drone strikes, also declaring force majeure.
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Oil production from Iraq’s main southern fields has dropped by about 70 per cent, as storage limits have been reached.
The United Arab Emirates’ Abhu Dhabi National Oil Company reduced offshore output, and Bahrain’s Bapco Energies also declared force majeure.
The unprecedented disruption has rattled global energy markets, pushing Brent crude futures to their highest levels since mid-2022 at close to US$120 a barrel.
While Saudi Arabia has accelerated crude shipments from the Red Sea via the East-West pipeline to Yanbu, the redirected volumes are insufficient to offset the millions of barrels sidelined by the Gulf closure, analysts have said.
That could leave consumers and businesses worldwide facing months of elevated fuel prices, as suppliers grapple with damaged infrastructure and paralysed logistics – even if hostilities cease quickly. REUTERS
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