South Korean Oil Refineries Closely Monitoring Situation In Saudi Arabia - Reports

MOSCOW (UrduPoint News / Sputnik - 16th September, 2019) South Korean oil companies said Monday that they had been closely monitoring the situation around the oil production cuts in Saudi Arabia following a drone attack, media reported.

On Saturday, Saudi Arabia had to shut down two Saudi Aramco's oil facilities, namely Abqaiq and Khurais, after a drone attack claimed by Yemeni Houthis caused massive fires. The incident caused a cut of oil production totaling 5.7 million barrels per day, about half of Saudi Arabia's daily oil output.

"We'll have to see how the situation develops, but we do not expect to see a supply disruption problem," an official of the S-Oil Corp told the Yonhap news agency.

The spokesman for the SK Innovation Co added that a short-term price spike was expected following the incident.

"Since refiners have diversified their sources of crude imports, there will not be a significant supply problem.

It's likely that oil prices will surge in the short-term, but we'll have to assess how that will affect our business," the spokesman said.

Saudi Arabia said it was working on restoring the production volumes, but the repair work is likely to take weeks, according to media reports. In order to maintain regular oil export, Riyadh is currently relying on stored crude.

On Monday morning, the prices of various oil benchmarks grew by 15-20 percent in the light of the incident.

US State Secretary Mike Pompeo accused Iran of being behind the attack, but Tehran refuted all allegations. Trump, meanwhile, said that Washington was almost certain that it had identified the culprit behind the attacks and the United States was ready to respond.