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In a Sated Oil Market, Saudi Arabia Attack Sinks Without Trace

  • Brent prices are now 4% lower than before the strike on Abqaiq
  • Weak economy, U.S. shale have transformed the market: Yergin
Workers repair a damaged refining tower at Saudi Aramco's Abqaiq crude oil processing plant following a drone attack in Abqaiq, Saudi Arabia, on Sept. 20.

Workers repair a damaged refining tower at Saudi Aramco's Abqaiq crude oil processing plant following a drone attack in Abqaiq, Saudi Arabia, on Sept. 20.

Photographer: Faisal Al Nasser/Bloomberg

It was the nightmare scenario dreaded by oil markets for decades: a direct strike right at the heart of Saudi Arabia’s energy production network. But when it finally came last month, crude traders almost immediately lost interest.

Although oil prices surged the most on record after a barrage of missiles and drones blasted the Abqaiq processing facility and Khurais oilfield on Sept. 14 -- instantly disabling half of Saudi output -- the gains have since evaporated. Crude is back below $60 a barrel, partly because Saudi Aramco has restored production so swiftly, but also reflecting deeper challenges afflicting the market.