Saudi Aramco Launches First Direct Air Capture Test Unit

The logo of Saudi Aramco is pictured outside Khurais, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo
The logo of Saudi Aramco is pictured outside Khurais, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo
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Saudi Aramco Launches First Direct Air Capture Test Unit

The logo of Saudi Aramco is pictured outside Khurais, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo
The logo of Saudi Aramco is pictured outside Khurais, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo

Saudi oil giant Aramco has launched a pilot direct air capture unit able to remove 12 tons of carbon dioxide per year from the atmosphere, it said on Thursday.

The facility, developed with Siemens Energy, is Saudi Arabia's first carbon dioxide direct air capture (DAC) unit and will be used to test CO2 capture materials, Aramco said.

"The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond," Ali A. Al-Meshari, Aramco senior vice president of technology oversight and coordination, said in Aramco's statement, Reuters reported.

"In addition to helping address emissions, the CO2 extracted through this process can in turn be used to produce more sustainable chemicals and fuels."

Aramco announced the pilot DAC unit with Siemens Energy in October 2023 and said at the time it would be completed in 2024 and was intended to pave the way for a larger pilot plant that would have the capacity to capture 1,250 tons of CO2 per year.

The state oil giant in December signed an agreement with oil services firms SLB and Linde to build a carbon capture and storage project in Jubail, Saudi Arabia. The first phase is expected to be completed by the end of 2027, capturing and storing up to 9 million tons of CO2 a year.



Oil Slips as Iran-Israel Conflict Enters Sixth Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Slips as Iran-Israel Conflict Enters Sixth Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices fell on Wednesday, after a gain of 4% in the previous session, as markets weighed up the chance of supply disruptions from the Iran-Israel conflict and as they ponder a direct US involvement.

Brent crude futures fell 93 cents, or 1.2%, to $75.52 a barrel by 0918 GMT. US West Texas Intermediate crude futures fell 88 cents, also 1.2%, to $73.96 per barrel.

US President Trump warned on social media on Tuesday that US patience was wearing thin, and called for an "unconditional surrender" from Iran.

While he said there was no intention to kill Iran's leader Ali Khamenei "for now," his comments suggested a tougher stance toward Iran as he weighs whether to deepen US involvement.

A source familiar with internal discussions said one of the options Trump and his team are considering included joining Israel on strikes against Iranian nuclear sites.

A direct US involvement threatens to widen the confrontation further, putting energy infrastructure in the region at higher risk of attack, analysts say.

"The biggest fear for the oil market is the shutdown of the Strait of Hormuz," ING analysts said in a note.

"Almost a third of global seaborne oil trade moves through this chokepoint. A significant disruption to these flows would be enough to push prices to $120 [a barrel]," the bank added.

Iran is OPEC's third-largest producer, extracting about 3.3 million barrels per day (bpd) of crude oil.

Meanwhile, Iranian ambassador to the United Nations in Geneva Ali Bahreini said on Wednesday that Tehran has conveyed to Washington that it will respond firmly to the United States if it becomes directly involved in Israel's military campaign.

Markets are also looking ahead to a second day of US Federal Reserve discussions on Wednesday, in which the central bank is expected to leave its benchmark overnight interest rate in the range of 4.25% to 4.50%.

However, the conflict in the Middle East and the risk of slowing global growth could potentially push the Fed to cut rates by 25 basis points in July, sooner than the market's current expectation of September, said Tony Sycamore, market analyst with IG.

Lower interest rates generally boost economic growth and demand for oil.

Confounding the decision for the Fed, however, is the Middle East conflict's potential creation of a new source of inflation via surging oil prices.

US crude stocks fell by 10.1 million barrels in the week ended June 13, market sources told Reuters, citing American Petroleum Institute figures on Tuesday. Official Energy Information Administration data is due later on Wednesday.