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Half of Saudi oil output offline after drone strikes

  • Drone strikes on the heart of the Saudi oil industry forced the kingdom to shut down half its crude production on Saturday, amounting to a loss of about 5M barrels a day, or roughly 5% of the world's daily production of crude oil, WSJ reports.
  • Yemen's Iranian-aligned Houthi rebels claimed credit for the attack, saying they sent 10 drones to strike at important Aramco (ARMCO) facilities, including the world's largest oil processing plant and a major oil field.
  • Crude prices will be on watch when trading reopens on Sunday evening.
  • Update: The production cut was taken as a precautionary measure, but most output will be restored with 48 hours, sources told Reuters, asking to not to identified before an official announcement.
  • Go deeper: While an oil price increase could benefit Aramco's upcoming IPO, if the Saudis can't turn production back on quickly, it could rattle investor confidence in the kingdom's national oil company.
  • ETFs: USO, OIL, UWT, UCO, DWT, BNO, SCO, DBO, DTO, OILU, USL, USOU, OILD, WTIU, USOI, OLO, OILK, SZO, USOD, OLEM, WTID, OILX, USAI, NRGD, NRGU, NRGZ, YGRN, NRGO, AOIL

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