Even though Saudi Arabian crude oil exports to the U.S. have fallen to record low levels, the outage caused by the attack on the Saudi Arabian Oil Co. facility at Abqaiq is still having an effect on U.S. consumers.
The Sept. 14 attack knocked an estimated 5.7 million barrels per day off the global market, representing the largest single-day decrease in history. Abqaiq is the largest gas-oil separation plant in the world, according to the U.S. Energy Information Administration. About 7% of the world's crude oil capacity flows through the facility.
In the wake of the attack, the EIA said West Texas Intermediate and Brent crude prices experienced their biggest single-day price increase in a decade. While both have given up much of those gains since the Saudis said repairs at Abqaiq should be completed by the end of the month, U.S. consumers will still feel a pinch.
"Although U.S. imports of crude oil from Saudi Arabia have declined during the past three years — and recently hit a four-week average record low of 380,000 b/d in the week ending September 6 — the United States still imports about 7 million b/d of crude oil," the EIA said Sept. 23. "As a result, a tighter global crude oil market and increased global crude oil prices will ultimately increase the price of crude oil and transportation fuels in the United States."
The EIA said every dollar per barrel of sustained price change means an average increase of 2.4 cents per gallon in petroleum product prices in the U.S. West Texas Intermediate prices increased from $54.85/bbl on Sept. 13 to $62.90/bbl on Sept. 16, the first day of trading after the attack; prices were at $58.14/bbl at midday Sept. 23. The average price per gallon of gasoline nationwide was $2.55 on Sept. 16, meaning prices could have increased by as much as 43 cents per gallon in the immediate aftermath of the Abqaiq attack.
Prices will likely continue to ease even if Abqaiq does fully come back online shortly as there are sufficient reserves to cover short-term production declines. The Organization for Economic Cooperation and Development said its members had 2.9 billion barrels of oil in reserve as of Sept. 1, which would cover about two months of its members' fuel consumption. President Donald Trump has also mentioned the possibility of tapping into the U.S. Strategic Petroleum Reserve to fill the gap, and the EIA said the U.S. could meet its net import needs by drawing down the reserve for 162 days.
