Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world's top producer by half, fuelling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business – the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent – while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi rebels in neighbouring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was "locked and loaded" to respond to the attack, while Secretary of State Mike Pompeo said: "The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression."
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
"Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning," said Jeffrey Halley, senior market analyst at OANDA.
Trump authorised the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world's biggest producer.