Markets

Saudi Arabia reportedly aims to restore one-third of lost oil output by Monday

Key Points
  • The drone strikes on facilities in Abqaiq and Khurais eliminated 5.7 million barrels of production over the weekend.
  • Officials believe that they can restore 2 million barrels by the end of the day Monday.
  • Experts said that the strikes could cause oil prices to rise up to $10 per barrel.
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Saudi oil facilities damaged at around 17 points of impact

Saudi Aramco is aiming to restore by Monday about a third of its crude output that was disrupted after drone attacks on two key oil facilities, The Wall Street Journal reported Sunday, citing Saudi officials familiar with the matter.

The drone strikes on facilities in Abqaiq and Khurais eliminated 5.7 million barrels of production over the weekend. Officials believe that they can restore 2 million barrels by the end of the day Monday, contrary to earlier claims that full production would resume early this week.

Aramco, the national oil company, has determined that its facilities were hit by missiles, people familiar with the matter told The Wall Street Journal. A U.S. government assessment determined that up to 15 structures at Abqaiq were damaged.

Smoke is seen following a fire at Aramco facility in the eastern city of Abqaiq, Saudi Arabia, September 14, 2019.
Stringer | Stringer

Saudi Aramco has 35-40 days of supply to meet contractual obligations, a source close to the matter told CNBC.

Experts said that the strikes could cause oil prices to rise up to $10 per barrel, which could cause as much as a 25 cent per gallon rise in gasoline prices. But the impact could be smaller depending on how quickly officials are able to restart oil production, said Roberto Friedlander, Seaport Global's head of energy trading.

"If it is a few days, the Saudis are working to restore production and will provide more information in the next 48 hours, the impact is more likely to be $3-5 to Crude," said Friedlander.

U.S. West Texas Intermediate (WTI) crude futures settled 0.4 percent lower at $54.85 on Friday, and Brent crude futures traded 0.2 percent lower at $60.25 per barrel.

This weekend's strikes are the biggest attack on Saudi oil infrastructure since 1990, when the Iraqi military fired scud missiles into the kingdom. The attack sent the Saudi stock market down 2.3 percent at the open on Sunday.

—CNBC's Hadley Gamble contributed to this report.

Read the original story in The Wall Street Journal