International benchmark Brent crude futures jumped above $70 for the first time in more than a year on Monday, before giving back those gains and settling the session in the red.
The surge in prices came after Saudi Arabia said its oil facilities were targeted by missiles and drones on Sunday. A Houthi military spokesman claimed responsibility for the attacks.
Brent traded as high at $71.38 per barrel, the highest level since Jan. 2020, while U.S. crude futures rose to $67.98 per barrel, a level not seen since Oct. 2018. However, oil ultimately retreated from those levels and finished the session lower. Brent shed $1.12, or 1.61%, to settle at $68.24 per barrel, while WTI settled $1.04, or 1.57%, lower at $65.05 per barrel.
Saudi Arabia's ministry of energy said a petroleum tank farm at one of the world's largest oil shipping ports was attacked by a drone and a ballistic missile targeted Saudi Aramco facilities, according to state news agency SPA.
A spokesman said neither attack caused any injury or loss of life or property, but shrapnel from the intercepted missile fell near residential areas in the city of Dhahran, SPA reported.
"Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy," the ministry said via state media. "They affect the security of petroleum exports, freedom of world trade, and maritime traffic."
Yahya Sare'e, a spokesman for Yemen's Houthis, said it carried out a "broad joint offensive operation" involving 14 drones and eight ballistic missiles.
He said on Twitter that other military sites were also targeted with four drones and seven ballistic missiles, adding that "the hit was precise."
"We promise the #Saudi regime painful operations as long as it continues its aggression and blockade on our country," he said in another post.
A Saudi-led coalition intervened in Yemen's civil war in 2015 and has continued to fight against the Houthis in what is seen as a proxy war with Iran.
The Houthis have reportedly stepped up attacks on Saudi Arabia in recent weeks.
The Biden administration last month said it would remove the Iran-backed Houthi rebels in Yemen from the Foreign Terrorist Organization and Specially Designated Global Terrorist lists, according to NBC News.
John Driscoll, director at JTD Energy Services, told CNBC that the primary effect of the attacks is psychological.
"They serve as a reminder that the Mideast is vulnerable and rife with tensions and rivalries that could overheat at any time," he said in an email.
However, he said the run up in prices could be short lived, noting that the Saudis said there was no significant damage to infrastructure.
Driscoll also said the timing is "noteworthy," given that the U.S. took military action against Iran and Iraq targets last week.
"One senses [that] lines are being drawn in the sand," he said.
— CNBC's Sam Meredith contributed to this report.