Global energy prices spiked on Monday after a weekend attack on key oil facilities in Saudi Arabia caused the worst disruption to world supplies on record. President Trump has warned the U.S. is "locked and loaded" to respond as two of his cabinet members blame the attack on Iran.

U.S. officials offered satellite images of the damage at the heart of the kingdom's crucial Abqaiq oil processing plant and a key oil field, alleging the pattern of destruction suggested the attack on Saturday came from either Iraq or Iran — rather than Yemen, as claimed by Iranian-backed Houthi rebels there.

Iran for its part called the U.S. allegations "maximum lies" and denied any role in the attack on the Saudi facilities.

Actions on any side could break into the open a twilight war that's been raging just below the surface of the wider Persian Gulf in recent months.

Already, there have been mysterious attacks on oil tankers that America blames on Tehran, at least one suspected Israeli strike on Shiite forces in Iraq, and Iran has shot down a U.S. military surveillance drone.

Crude spikes, then settles up 10%

 

Benchmark Brent crude gained nearly 20% in the first moments of trading Monday before settling down to 10% higher as trading continued. A barrel of Brent traded up $6 to $66.28.

U.S. benchmark West Texas crude was up around 9%. U.S. gasoline and heating oil similarly were up over 8% and 7% respectively before markets opened in New York.

Saturday's attack halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia's global daily exports and more than 5% of the world's daily crude oil production. Most of that output goes to Asia.

At 5.7 million barrels of crude oil a day, the Saudi disruption would be the greatest on record for world markets, according to figures from the Paris-based International Energy Agency. It just edges out the 5.6 million-barrels-a-day disruption around the time of Iran's 1979 Islamic Revolution, according to the IEA.

Reaching into the reserves?

 

Saudi Arabia has pledged that its stockpiles would keep global markets supplied as it rushes to repair damage at the Abqaiq facility and its Khurais oil field.

The Trump administration, meanwhile, said it was prepared to tap the U.S. Strategic Petroleum Reserve "if needed" to maintain a consistent supply and prevent a massive price hike. The Reserve is a stockpile of about 695 million barrels of crude, maintained by the Department of Energy, to deploy precisely for the purpose of mitigating fluctuations in the global oil supply. The Department of Energy says the reserve is sufficient to cover "the equivalent of 143 days of import protection."

 

The Washington-based Center for Strategic and International Studies has said the area includes "storage tanks and processing and compressor trains — which greatly increases the likelihood of a strike successfully disrupting or destroying its operations."

 

Stabilization means processing so-called sour crude oil into sweet crude. That allows it to be transported onto transshipment points on the Persian Gulf and the Red Sea, or to refineries for local production.