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Saudi Arabia recovered the level of oil production eleven days after the refinery attacks

September 30, 2019


The Saudi state oil company, Aramco, announced on Monday that it recovered on September 25 the level of production prior to the drone attacks against the Abqaiq and Jurais refineries on August 14. Yemeni Huthi rebels have claimed responsibility for the attack, but Riyadh points to Iran as responsible for the aggression against these strategic infrastructures.

The executive director of the Commercial Section of Aramco, Ibrahim al Buainain, has reported the recovery of production at the previous level during an event in the city of Fujaira, in the United Arab Emirates. In addition, he has ensured that production is already at the “desired” level.

This Monday, the credit rating agency Fitch Ratings has decided to review the 'rating' as a long-term issuer of Saudi Arabia to 'A', one step less, due to the exposure of its oil infrastructure to external attacks and the deterioration of your fiscal balance

Several days ago, the Islamic country reported two drone attacks against two oil processing facilities. One of them is located in Abqaiq, near Damman, in the Eastern Province, while the other is in the Hijrat Jurais oil field.

The United States and Saudi Arabia have accused these attacks on Iran, even though they were claimed by the Yemeni Huthi militias. The aggression caused crude oil production to be reduced by 5.7 million barrels of oil a day, half of Saudi production.

“We believe there are more risks of attacks on Saudi Arabia, which could result in economic damage,” said Fitch analyst Krisjanis Krustins.

In the opinion of the risk rating agency, Saudi Arabia is “vulnerable” to an escalation of geopolitical tensions in the Middle East due to its foreign policy position, which is “closely aligned” with that of the United States with respect to Iran, as well as for his presence in the war in Yemen.

On the other hand, Fitch has also made the reduction in the country's sovereign rating due to the forecast that it will close 2019 with a 6.7% deficit of GDP, compared to 5.9% recorded in 2018. This growth of the 'numbers red 'is because during this year oil prices are being, on average, lower than during the previous year.

In the event that there is a new resurgence of tensions in the Middle East that affect “economic policies and key activities,” Fitch has warned that it could consider an additional reduction of the Saudi Arabian note.