Oil prices retreated on Monday after hitting their highest since May at the open, on fears over supply disruptions following an attack on Saudi Arabia's oil facilities on Saturday that cut more than 5% of global oil supply.
International benchmark Brent crude futures rose $7.06 a barrel or 11.7% from their New York close on Friday to stand at $67.28 per barrel by 0108 GMT, after soaring more than 19% to a session high of $71.95 per barrel at the opening.
U.S. West Texas Intermediate (WTI) futures climbed $5.76 a barrel or 10.5% to $60.60 a barrel, after jumping more than 15% to a session high of $63.34 a barrel.
Prices eased off their peaks after U.S. President Donald Trump said he approved the release of oil from the U.S. Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined due to the attack on Saudi Arabia's facilities.
State oil giant Saudi Aramco said the attack cut output by 5.7 million barrels per day, at a time when Aramco is trying to ready itself for what is expected to be the world's largest share sale.
Aramco gave no timeline for output resumption. A source close to the matter told Reuters the return to full oil capacity could take "weeks, not days."
Saudi Arabia's oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, an industry source briefed on the developments told Reuters on Sunday.
"The surge in prices is the natural knee jerk reaction but the path ahead and ability to sustain at elevated levels remains dependent on the duration of the outage, the ability to meet export commitments through domestic drawdowns, demand elasticity at higher prices as well as government and agency policy," said Michael Tran, managing director of energy strategy at RBC Capital Markets in New York.
The attack on plants in the heartland of Saudi Arabia's oil industry, including the world's biggest petroleum-processing facility, came from the direction of Iran, and cruise missiles may have been used, according to a senior U.S. official.
Trump also said the United States was "locked and loaded" for a potential response to the attack on Saudi Arabia's oil facilities.
In the wake of the attack on Saudi Arabia's key oil facilities, S&P Global Platts said concerns about supply security in the Middle East have increased and the risk premium in the global crude market is expected to rise.
ANZ Research also said in a note that the market would price in "a sizable global geopolitical risk premium".
"Any expectation that the market had about the U.S. easing sanctions on Iran following President Trump's dismissal of John Bolton will quickly dissipate. This should see Brent crude test the $70 per barrel mark in the short term," ANZ Research said.
Saudi Arabia is set to become a significant buyer of refined products after attacks on Saturday, consultancy Energy Aspects said in a note.
Saudi Aramco will likely buy significant quantities of gasoline, diesel and possibly fuel oil while cutting liquefied petroleum gas exports.
U.S. gasoline futures jumped 11%, while U.S. heating oil futures rose about 6.5% at the open.
Meanwhile, Saudi Aramco has told one Indian refinery there will be no immediate impact on oil supplies as it will deliver crude from other sources and has adequate inventory, a source with the refinery said.
Other Asian buyers such as Thailand have also said the attack would have no immediate impact on oil imports.