Oil prices dropped about 6% on Tuesday after Saudi Arabia’s energy minister said the kingdom has fully restored its oil production hit by an attack this weekend that shut 5% of global oil output.
Saturday’s attacks raised the specter of a major supply shock in a market that in recent months has been preoccupied with demand concerns and faltering global growth. Oil surged as much as 20% at one point on Monday.
During a news conference on Tuesday, Saudi Arabia’s energy minister also said it will keep its full oil supply to its customers this month.
Production could be fully online within two to three weeks and the kingdom was close to restoring 70% of the 5.7 million barrels per day lost after the attacks, a top Saudi source briefed on the latest developments told Reuters.
U.S. West Texas Intermediate (WTI) crude futures fell $3.52, or 5.6%, to $59.38 a barrel.
In the immediate fallout from the attacks, state-owned producer Saudi Aramco told some Asian refiners it would meet its oil commitments, albeit with changes, sources said.
The attacks on crude-processing facilities at Abqaiq and Khurais resulted in the largest single supply disruption in half a century, and threw into question Saudi Arabia’s status as supplier of last resort.
The prospect of releases from strategic oil reserves in the United States, and other industrialized countries that the International Energy Agency advises, such as Japan, have weighed on prices, but the geopolitical threat of retaliation is causing concerns.