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00:00SARA VAKHSHOURI. WE ARE SEEING OUTSIZE MOVES IN BRENT AND -- OUTSIZE TO MOVES IN -- OUTSIZED MOVES IN BRENT AND WTI, BUT YOU SAY CALM DOWN? SARA: THEY WILL GO HIGHER BUT NOT AS EXPECTED. WE DON ' T EXPECT SHOCK BECAUSE THE MARKET IS FULLY SUPPLIED. IF THERE IS GOING TO BE A PRICE RISE WE ARE EXPECTING A GRADUAL ONE. PAUL: IT IS STILL EARLY DAYS, DAMAGE STILL BEING LOOKED AT BUT HOW LONG DO YOU ANTICIPATE THIS LASTING AND WHAT IS THE LAST -- THE WORST-CASE SCENARIO? SARA: ACCORDING TO SAUDI OFFICIALS WE HAVE 5.7 MILLION BARRELS PER DAY CUT. 7 MILLION BARRELS WERE PRODUCED, AND THIS IS ABOUT HALF OF SAUDI ARABIA ' S PRODUCTION. IT IS HUGE. SAUDI ARABIA HAS THE HUGEST CAPACITY IN THE MARKET. WE SHOULD EXPECT IT TO HELP SUPPLY INTERRUPTION WHICH WAS OUT OF THE QUESTION NOW SAUDI ITSELF IS -- HAS BEEN UNDER ATTACK. THE KEY POINT IS SAUDI ARABIA ITSELF HAS CURRENCIES OF NEARLY 188 MILLION BARRELS OF CRUDE OIL ONLY AND ADDITIONAL LIQUIDS. THE CRUDE OIL IS 188 MILLION BARRELS. IF YOU TAKE THAT 5.7 MILLION BARRELS A DAY OF SUSPENDED PRODUCTION AWAY, SAUDI HAS ABOUT 30 DAYS OF SUPPLYING ITS OUTAGE FROM DOMESTIC INVENTORY. SAUDI ARAMCO HAS INVENTORIES IN EUROPE, ROTTERDAM, AND IT HAS INVENTORIES IN JAPAN AND EGYPT. THESE ARE SAUDI INVENTORIES. WE HAVE U.S. INVENTORIES, EUROPEAN UNION, AND CHINESE. THE MARKET IS PRETTY WELL SUPPLIED. THE ONLY PRICE -- THE ONLY EFFECT THAT PUSHES PRICES HIGHER TODAY ARE TWO MAJOR RISK PREMIUMS WE ARE IS UNCERTAINTY BECAUSE MARKET IS NOT SURE FOR HOW LONG THE PRODUCTION IS GOING TO BE EXTENDED -- GOING TO BE SUSPENDED AND THE MARKET IS WORRIED THERE WILL BE ADDITIONAL TAX FOR SUPPLY -- ATTACKS FOR SUPPLY INTERRUPTION IN THE REGION -- OR SUPPLY INTERRUPTION IN THE REGION. SHERY: ARE YOU WORRIED ABOUT INTERNAL ASSETS? SARA: SAUDI ARABIA, DESPITE ITS POSITION, STILL HAS THE HIGHEST RELIABLE SURPRISED -- RELIABLE SUPPLY. IT HAS A HUGE INVESTMENT BOTH INSIDE ITS OWN KINGDOM AND OUTSIDE OF THE KINGDOM TO SECURE THE SUPPLY CHAIN INFRASTRUCTURE FROM INVENTORIES. OBVIOUSLY WHAT HAS BEEN ATTACKED WAS VERY WELL-DESIGNED, TARGETED BECAUSE IT IS A PROCESSING UNIT THAT PROCESSES CRUDE OIL PRODUCED IN DIFFERENT FIELDS BEFORE THE EXPORTS. WE MIGHT EXPECT FOR WEEKS THIS COULD BE SUSPENDED. BUT WHAT IS IMPORTANT IS SAUDI ARABIA IS ABLE BECAUSE OF INVESTMENT ON INVENTORIES, STORAGE AND OTHER FACTORS, TO MAINTAIN THESE OUTAGE AND STILL SUPPLY CUSTOMERS WHILE REPAIR HAS BEEN DONE. SHERY:

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Saudi Arabia Has Enough Inventory to Cover 30-Day Suspension, Says SVB Energy’s President

Sara Vakhshouri, founder and president at SVB Energy International, discusses the drone attack on a Saudi Arabia oil plant and its implications for oil markets. She speaks on “Bloomberg Daybreak: Asia.” (Source: Bloomberg)

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