Attacks on two critical production facilities in Saudi Arabia over the weekend have boosted concerns about supply security in the Middle East and raised the risk premium in the global crude market, according to several energy market analysts.
An oil processing facility at Abqaiq and the nearby Khurais oil field were attacked on Saturday, knocking out 5.7 million barrels of daily crude production — or 50% of the kingdom's oil output. That's more than 5% of global daily oil production.
International benchmark Brent crude rose as much as 19.5% to $71.95 per barrel on the news. It marked the biggest intraday jump on record.
At around 7:45 a.m. ET, the contract was at $66.58, up $6.36 or 10.56%.
U.S. West Texas Intermediate futures climbed as much as 15.5% to $63.34. The contract was later at $60.24, up $5.39 or 9.83%.
Jeff Currie, head of commodities research at Goldman Sachs, said in a research note published Sunday that the strikes were a "historically large disruption on critical oil infrastructure."
"These events represent a sharp escalation in threats to global supply with risks of further attacks," he added.
Oil prices came off their peaks after President Donald Trump authorized the use of the country's emergency stockpile to ensure stable supply.
Saudi Aramco reportedly aims to restore about a third of its output, or 2 million barrels, by Monday. The country's national oil company has 35 to 40 days of supply to meet contractual obligations, according to a source close to the matter.
In the absence of official comments on the timeline and scale of production losses, Goldman Sach's Currie said it was "difficult" to predict the magnitude of a price rally over the coming weeks.
Nonetheless, he sought to provide a rough first estimate of possible outcomes for crude futures.
A very short outage of approximately one week would most likely result in a price impact of $3 to $5 a barrel, Currie said.
In the event of an outage at current levels of two to six weeks, the U.S. investment bank said it expected the price move would be between $5 and $14 a barrel.
"Should the current level of outage be announced to last for more than six weeks, we expect Brent prices to quickly rally above $75 (a barrel), a level at which we believe an SPR release would likely be implemented, large enough to balance such a deficit for several months and cap prices at such levels," Currie said.
The Strategic Petroleum Reserve (SPR) is an emergency reserve of petroleum oil constantly added to in order to prevent a total depletion of crude during unstable times. It is managed by the U.S. Department of Energy.
"An extreme net outage of a 4 million barrels per day for more than three months would likely bring prices above $75 (a barrel) to trigger both large shale supply and demand responses," Currie said.
The scale of the oil strikes "will encourage markets to re-examine the need for considering an oil geopolitical risk premium," analysts at risk consultancy Eurasia Group said in a research note published Saturday.
"A small $2-$3 premium would emerge if the damage appears to be an issue that can be resolved quickly, and $10 if the damage to Aramco's facilities is significant leasing to prolonged supply outages," they added.
Prior to the weekend attack, the oil market was focused on supply surpluses as well as slowing global growth concerns amid the U.S.-China trade dispute.
Just last week, both OPEC and the International Energy Agency (IEA) said oil markets could end up with a surplus in 2020, despite an agreement by OPEC and its allies to limit supplies.
Jason Gammel, energy analyst at Jefferies, said in a research note published Sunday that the oil strikes constituted an "unprecedented threat to supply."
"The risk of wider conflict in the region, including a Saudi or U.S. response, will likely raise the political risk premium on crude prices by $5-10 (a barrel)."
"In a worst-case scenario that resulted in a shutdown of oil transport through the Straits of Hormuz, oil prices could push through $100 (a barrel). We think this outcome is highly unlikely however, not least because important Iranian allies like the Chinese would be hit hard," Gammel said.
—CNBC's Huileng Tan contributed to this report.