Why attack on Saudi leaves world without spare oil capacity
Haven't OPEC and its allies been cutting output?
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's exports have fallen over 2 million bpd since April.
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.
What about US shale?
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.
In pic: First ship carrying shale gas from the US, arrives in the Firth of Forth on route to Grangemouth Oil refinery in Edinburgh, Scotland.
So what happens now? what about oil in storage?
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 the markets were still well supplied despite the Saudi disruptions.
What happens if there is another supply disruption?
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.