Brent crude surges by 20% on Monday, the biggest gain since the 1991 Gulf War
Saudi Arabia is believed to be on track to quickly restore at least a third of its oil production lost to devastating attacks, as it scrambles to soothe market jitters ahead of a mega stock listing.
Oil prices rocketed on Monday after the strikes on Abqaiq –- the world's largest oil processing facility –- and the Khurais oil field in eastern Saudi Arabia knocked out nearly half of the top crude exporter's production.
Seeking to assuage nervous markets, Saudi Energy Minister Prince Abdulaziz bin Salman has said the kingdom would use its vast inventories to partially make up for lost production, and the US also authorised the release of its strategic reserves.
But benchmark Brent crude surged by 20 percent on Monday -- the biggest gain since the 1991 Gulf War -- after US President Donald Trump hinted at a military response to the attacks his administration has blamed on Iran.
The Energy Intelligence specialist newsletter cited industry sources as saying Aramco was "close to restoring as much as 40 percent" of the lost production, or about 2.3 million barrels per day (bdp).
The Wall Street Journal cited people familiar with the damage estimates as saying the hit facilities would take weeks to return to full production capacity.
However, one of its sources told the newspaper: "We should be able to have two million barrels a day back online... by tomorrow (Monday)."
Industry consultant Energy Aspects also estimated the country would be able to restore almost half the lost production as early as Monday.
Saudi-owned Al-Arabiya television said Monday that Aramco was ready to restart the Khurais plant, which handles 1.5 million bpd.
The kingdom pumps 9.9 million bpd, almost 10 percent of global demand, of which seven million bpd is destined for export.
The kingdom also has a spare capacity of around two million bpd that it can draw on at times of crisis.
But a prolonged production delay would hit the Saudi economy hard, experts warn.
Saudi Arabia's real gross domestic product growth could be lowered by 1.2 to 1.4 percentage points "under a scenario where it takes one month to fully restore Saudi oil output", said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
That assumption is based on a loss of 5.7 million bpd for the first two weeks, and a smaller loss of 2.5 million bpd for the remaining two weeks, Malik said in a report.
An extended delay could potentially see prices climb to "triple digits", warned Saudi economic consultant Sulaiman al-Assaf, a development that would add to the headwinds facing the slowing global economy.
The attacks will prove to be a "headache for oil markets", said Britain-based consultancy Verisk Maplecroft.
"The difficulty in accurately pricing in the attack owes a lot to the lack of clarity over how extensive the disruption to supply will be," it said in a report.
"But it owes even more to the fact that right now no one knows how Saudi Arabia will respond."
Saudi authorities, known for their penchant for secrecy, have not allowed reporters near the plants where security has been tightened since the attacks.
The government said late Saturday that an update would be provided within two days, and all eyes are on official word on the state of play, which could offer reassurance to world markets.
The attack is a major test for Saudi Arabia as it could dampen investor confidence in Aramco's upcoming two-stage initial public offering (IPO), a mammoth listing that the government hopes will generate up to $100 billion.
The IPO, earlier scheduled for 2018, has already been mired in delays as it reportedly struggled to reach a $2 trillion valuation desired by Saudi rulers.
The attacks could complicate the IPO plans given "rising security risks" and "potential impact on its valuation", the Eurasia group consultancy said.
Yemen's Iran-aligned Huthi rebels have claimed responsibility for Saturday's strikes, one of the most destructive attacks on Saudi oil facilities, but the kingdom has not yet officially accused any side.
US Secretary of State Mike Pompeo pointed the finger squarely at Tehran, saying there was no evidence the "unprecedented attack on the world's energy supply" was launched from Yemen.
And Trump has raised the possibility of military retaliation, saying Sunday that Washington was "locked and loaded" to respond to the attack.