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Saudi Arabia - The 1990 Gulf Crisis.

Iraq's invasion of Kuwait on Aug. 2, 1990 meant 5m b/d of Iraqi and Kuwaiti oil output was out of the market. Pressed by Washington, US firms provided SA with technical help and equipment at a speed matching the US military build-up in the Eastern Province. That enabled SA to raise crude oil production to over 8m b/d in October 1990, by which time world oil prices had risen sharply.

Much of the increase in capacity was done from late 1990 through a re-opening of existing facilities: 146 oil wells and 12 GOSPs in the Ghawar, Harmaliyah and Khurais fields, together with all associated gas gathering and wet crude handling facilities. These added over 1m b/d of AEL, AL and Arab Medium crudes to meet world demand. Other efforts to raise output included opening up GOSPs in the Safaniyah, Zuluf, Marjan, Khursaniyah, Qatif and Abu Hadriyah. Work also involved the drilling of 82 oil wells and a new 72-km pipeline to connect 42 wells to GOSPs in these fields.

When the Gulf war broke out in January 1991, Saudi output averaged 8.7m b/d and world oil prices fell. Capacity additions enabled SA to produce 9.1m b/d in August 1991, with another 185,000 b/d from the Saudi share of the DZ. That helped restore market stability after an aborted coup d'etat in the Soviet Union and a September OPEC meeting. Later the Saudi output fell to 8m b/d in line with an OPEC quota. But the share of lighter crudes in Saudi exports at times reached almost 7m b/d.
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Publication:APS Review Oil Market Trends
Date:Oct 3, 2011
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