US offers oil as an alternative .. Full return of Saudi oil supplies may take weeks

Saudi Arabia's oil supply capacity could be fully restored after Saturday's attack on two Aramco facilities, a source familiar with the matter told Reuters on Sunday. Of half the production.

The attack on Abqaiq and Khurais halted some 5.7 million barrels per day of Saudi oil production, and Saudi officials have not given a timetable for a full return of supplies.

The reaction to the attack was negative in other Gulf markets as well, with Kuwait's main index down 1.1% and Dubai 0.8%.

Saudi Basic Industries Corp (Sabic), the kingdom's largest petrochemical company, fell 3.5 percent after reporting a 49 percent drop in feedstock supplies after the attack.

Use the US Reserve
A spokeswoman for the US Department of Energy said the administration of President Donald Trump is ready to use the US emergency oil reserve if necessary.

Energy Minister Rick Perry is "ready to use resources from the Strategic Petroleum Reserve if necessary to offset any disruption in the oil markets as a result of this aggression," Shaylin Haynes said.

Houthi
Yemen's Houthi group has claimed responsibility for attacks on two plants in the heart of Saudi Arabia's oil industry, including the world's largest oil refinery in Abqaiq.

Haynes said Perry directed the ministry's leadership to work with the IEA in Paris "on possible options for collective global action if necessary."

The United States has at times coordinated with the IEA mass oil withdrawals from international reserves.

President Trump has long urged members of the Organization of the Petroleum Exporting Countries (OPEC) to produce more oil to control crude prices.

A statement from Saudi Aramco said the kingdom's production would fall by 5.7 million barrels per day, more than half of Saudi production.

"Oil prices will jump due to this attack," said Jason Burdoff, founding director of the Center for Global Energy Policy at Columbia University in New York.

Last year, Aramco's exports exceeded seven million barrels per day of crude oil, with three-quarters of these exports being delivered to customers in Asia. Saudi Arabia has reserves of about 188 million barrels, equivalent to the processing capacity in Abqaiq for about 37 days, according to a note on Saturday from Rapidan Energy Group.

surplus
The surplus production capacity of the Organization of the Petroleum Exporting Countries (OPEC), the untapped production capacity that can be used to provide consumers in the event of shortage of supplies;

In August, Saudi Arabia's actual spare capacity of 2.3 million bpd was more than two-thirds of OPEC's 3.2 million bpd, according to IEA estimates. Kuwait and the United Arab Emirates contribute most of the difference.

Analysts said Russia may have spare capacity in the wake of a global deal between OPEC and its allies to limit production to boost prices.

"Every day the facility remains closed, the world loses another five million barrels of oil production. The world's spare capacity is not five million barrels a day," said Andy Lipo, president of Lipo Oil Associates.