Global oil prices surged the most in more than two decades Monday after a weekend drone attack on two Saudi Arabian crude facilities that could shutdown at least 5% of world production and spark renewed concerns of military conflict in the Gulf region.

Saudi Arabia has suggested Iran, which has also been implicated in drone attacks on various oil tankers in the Strait of Hormuz earlier this year, of orchestrating the attacks, although rebels linked to the Yemeni Houthi have claimed responsibility. Senior U.S. officials, including Secretary of State Mike Pompeo, have also heavily implicated Iran as being behind the attacks.

Riyadh estimates the disruption, which has shut nearly all of the Kingdom's -- and 5% of the world's -- daily production of 5.7 million barrels, could take weeks to correct, but said it could tap its 188 million barrels in reserves to keep global markets stable. President Donald Trump has also said the U.S. could tap its Strategic Petroleum Reserve, if needed, in order to maintain consistent supplies. 

"The market has suddenly shifted from being oversupplied to undersupplied, and even if we combine all the spare global capacity available, that won't make up half the current disruption," said FXTM market analyst Han Tan. "However, Saudi Arabia has a significant volume of oil in storage that will keep exports flowing and the US has stated it may even tap into its Strategic Petroleum Reserve if needed.

"This would soften the damage to some extent, but again it's all about when production returns back to normal," he added. "The longer the disruption goes on, the more damage will be felt."

Brent crude contracts for November delivery, the global benchmark, were seen $7.26 higher from their Friday close in New York and changing hands at $67.48 per barrel in early Monday trading, after reaching as high as $71.95 per barrel earlier in the session, a near 20% gain that marked the biggest single-day spike since the Gulf War in 1991.

WTI contracts for October, which are more tightly linked with U.S. gasoline prices, were marked $6.36 higher at $62.21 per barrel after trading as high as $63.34 at the start of the overnight session.

Secretary of State Pompeo's statement that "amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply", certainly suggest the U.S. is ready to target Tehran with either an economic or a military response, although President Trump would only say that "there is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed".