* OPEC oil production: https://tmsnrt.rs/2LArZY3
* U.S. oil production: https://tmsnrt.rs/2VVVEiv
* OPEC spare capacity (EIA): https://tmsnrt.rs/2VVkYFd
* Saudi Arabia crude stocks: https://tmsnrt.rs/31saE7g
LONDON, Sept 16 (Reuters) - The strike on the heartland of
Saudi Arabia's oil industry, including damage to the world's
biggest petroleum-processing facility, has driven oil prices to
their highest level in nearly four months. Here are some facts about the impact on oil supply and spare
capacity:
WHY IS IT SO DISRUPTIVE FOR GLOBAL OIL SUPPLIES?
The attack on Saudi oil facilities on Saturday not only
knocked out over half of the country's production, it also
removed almost all the spare capacity available to compensate
for any major disruption in oil supplies worldwide.
The attack cut 5.7 million barrels per day (bpd) of Saudi
crude output, over 5 percent of the world's supply. But the
attack also constrained Saudi Arabia's ability to use the more
than 2 million bpd of spare oil production capacity it held for
emergencies.
The kingdom has for years been the only major oil producing
country that has kept significant spare capacity that it could
start up quickly to compensate for any deficiency in supply
caused by war or natural disaster.
Most other countries cannot afford to drill expensive wells
and install infrastructure, then maintain it idle.
Before the attack, the Organization of the Petroleum
Exporting Countries (OPEC) global supply cushion was just over
3.21 million barrels per day (bpd), according to the
International Energy Agency (IEA).
Saudi Arabia - the de facto leader of OPEC - had 2.27
million bpd of that capacity. That leaves around 940,000 bpd of
spare capacity, mostly held by Kuwait and the United Arab
Emirates. Iraq and Angola also have some spare capacity. They
may now bring that production online to help plug some of the
gap left by Saudi Arabia - but it won't be enough.
HAVEN'T OPEC AND ITS ALLIES BEEN CUTTING OUTPUT? CAN'T THEY
JUST REVERSE THOSE CUTS?
Yes, OPEC and its allies such as Russia have cut output to
prevent prices from weakening because the market has been
oversupplied.
Those cuts aimed to reduce supply by 1.2 million bpd. But
much of that was from Saudi Arabia so it now cannot be reversed
quickly.
Non-OPEC members such as Russia are pumping near capacity,
with perhaps only 100,000-150,000 bpd of available additional
production.
WHAT ABOUT IRAN?
Iran holds spare capacity but it cannot get the oil to
market because of sanctions imposed by the government of U.S.
President Donald Trump.
Iran's exports have fallen over 2 million bpd since April.
https://tmsnrt.rs/2VVkYFd
Washington has said Iran was behind Saturday's attack, so is
unlikely to ease sanctions to allow Iran to plug a gap it
believes was created by Tehran.
Iran, for its part, said after the attack that it would pump
at full volume if sanctions were eased.
AND VENEZUELA?
U.S. sanctions have also impacted the Venezuelan oil
industry. But Venezuelan output has been in free fall for years
and state oil company PDVSA is unlikely to be able to boost
production much even if sanctions were eased.
WHAT ABOUT U.S. SHALE? CAN SHALE PRODUCERS PUMP MORE?
The United States has become the world's top crude producer
after years of rapid growth in supply from the shale sector,
much of it pumped from fields in Texas. The U.S. has also grown
as an exporter, and shipped more crude to international markets
in June than Saudi Arabia.
Shale producers can move quickly to pump more when prices
rise, and can bring production online in a matter of months.
That is a much faster time line than most traditional oil
production.
If the Saudi outage looks like it will be prolonged and oil
prices rally significantly, then shale producers will raise
output.
But even if shale producers pump more, there are constraints
on how much the United States can export because oil ports are
already near capacity.
SO WHAT HAPPENS NOW? WHAT ABOUT OIL IN STORAGE?
It all depends on how long the outage lasts.
Saudi Arabia, the United States and China all have hundreds
of millions of barrels of oil in strategic storage. That is the
storage that governments keep for exactly this scenario - to
compensate for unexpected outages in supply.
They can release oil from strategic storage to meet demand
and temper the impact on prices. U.S. President Donald Trump
said on Sunday he had authorised a release from the U.S.
Strategic Petroleum Reserve.
The IEA, which coordinates energy policies of industrialised
nations, advises all its members to keep the equivalent of 90
days of net oil imports in storage.
Oil from storage should keep the market supplied for some
time, but oil markets will likely become increasingly volatile
as storage is run down and the possibility of a supply crunch
rises.
The IEA said on Saturday the markets were still well
supplied despite the Saudi disruptions.
"We are massively oversupplied," said Christyan Malek, head
of oil and gas research for Europe, Middle East and Africa at
J.P. Morgan, adding it would take five months of a 5 million-bpd
outage to take global crude supply levels back to a 40-year
normal average.
"Having said that, this attack introduces a new,
irreversible risk premium into the market," he added.
WHAT HAPPENS IF THERE IS ANOTHER SUPPLY DISRUPTION?
With no spare capacity, future disruptions would cause oil
prices to rise. A higher price over time will encourage
producers to invest and pump more, while at the same time
reducing consumption.
OPEC member Libya is in the middle of a civil war, which
threatens its ability to continue pumping oil. Another big
Libyan disruption would add to the shocks and highlight the lack
of spare capacity.
Nigerian exports have also suffered from disruptions.
Even before the Saudi attack, spare capacity was falling.
Consultancy Energy Aspects has said it expects OPEC spare
capacity to fall to below 1 million bpd in the fourth quarter
from two million bpd in the second quarter of 2019.
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OPEC Oil Production https://tmsnrt.rs/2LArZY3
OPEC Oil Production png https://tmsnrt.rs/2VXGPMh
U.S. Oil Production https://tmsnrt.rs/2VVVEiv
U.S. Oil Production png https://tmsnrt.rs/2Wzk9yX
OPEC oil production capacity interactive https://tmsnrt.rs/2VVkYFd
OPEC oil production capacity png https://tmsnrt.rs/2VVl0wP
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