Global oil prices spiked higher Thursday following multiple media reports that Saudi Arabia has asked neighboring Iraq for as much as 20 million barrels of crude to support domestic refineries.

The request, first reported by the Wall Street Journal, raises doubt as to whether the Kingdom -- and the world's second-largest producer behind the United States -- will be able to return to full capacity this month following drone attacks on key facilities in Abqaiq and Khuaris. Energy Minister Prince Abdulaziz bin Salman told reporters earlier this week that the 5.7 million barrel per day hit to production would be revered by the end of this month.

Brent crude contracts for November delivery were seen $1.65 higher from their Wednesday close in New York at $65.25 per barrel while WTI contracts for the same month were marked $1.20 higher at $59.31 per barrel.

The Energy Department estimating a decline in crude stocks at the Cushing, Oklahoma delivery hub, which fell to the lowest in nearly a year, and President Donald Trump's ordering of "substantial" U.S. sanctions on Iran for its involvement in the Saudi attacks yesterday, added to upward oil price pressures in early European trading.

However, gains from both the Saudi attacks, as well as Trump's renewed stance on Iran sanctions, have been tempered by the rise in U.S. shale production, which the Energy Department expects to reach 8.8 million barrels per day next month.

Around half of that total -- a record high 4.485 million barrels -- is expected to come from the shale-rich Permian Basin that laps between Texas and New Mexico, with increases also forecast for the Bakken region shared by North Dakota and Montana and the Eagle Ford field in north Texas.

"Saudi Arabia said that it will use existing inventories to fill the supply gap; however, inventories have already been depleted this year due to output cuts and the supply gap could be overwhelming if the current output disruptions are prolonged," said ING's Warren Patterson.

OPEC production cuts, which have taking more than 1.2 million barrels per day from the market since late 2017, and are expected to continue into the first quarter of next year, have not only depleted Saudi Arabia's overall stockpiles but also reduced the so-called supply cushion in global crude markets, making them increasingly vulnerable to disruption-lead price surges.

U.S. sanctions on the sale of crude from Iran, whose exports have fallen more by more than 2 million barrels per day since April, as well as similar restrictions on exports from Venezuela, have kept global markets tight for much of the first half of the year.