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Does Russia benefit from attack on Saudi oil facility?

The attacks on Saudi oil production facilities may bring Russia some short-term benefits, but the picture becomes more complicated in the long run.
A metal part of a damaged tank is seen at the damaged site of Saudi Aramco oil facility in Abqaiq, Saudi Arabia, September 20, 2019. REUTERS/Hamad l Mohammed - RC1941E02750

Following the Sept. 14 attacks on Saudi oil infrastructure, some observers jumped to the conclusion that oil-exporting countries, Russia in particular, would be the main beneficiaries of the incident. If Riyadh failed to bring its output back on line within a short period, the argument went, the existing spare production capacity of other oil-exporting countries would not suffice to compensate for the lack of almost 6 million barrels per day on the market. The supply deficit, in turn, could raise oil prices far beyond the current level, potentially surpassing the $100 per barrel threshold.

Such a scenario would mean the enrichment of key oil producers, but bring no benefit to large oil consumers, such as the United States, European Union, India, China, South Korea and Japan. Parallel to that, the decrease in Saudi oil exports would resolve the projected problem of global oil oversupply in 2020 and allow the members of OPEC+, the group of OPEC and non-OPEC countries, to maximize profits by abandoning the production limitations they had adopted in 2016 to support oil prices. Rumors about secret negotiations by the Saudis to purchase Iraqi oil to feed their petrochemical industry, whose feedstock was stopped by the Abqaiq attack, only strengthened expectations of OPEC+ abolishing its production limits.

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