Oil prices dropped sharply today after a top Saudi Arabian source told Reuters production could be fully back on line within weeks.

This is quicker than initially thought following weekend attacks that halved the kingdom's output. 

Saturday's attacks raised the spectre of a major supply shock in a market that in recent months has been preoccupied with demand concerns and faltering global growth. 

Oil surged as much as 20% at one point yesterday. 

Production could be fully online within two to three weeks and the kingdom was close to restoring 70% of the 5.7 million barrels a day lost after the attacks, a top Saudi source briefed on the latest developments told Reuters.

Brent crude was down $3.72, or 5.4%, at $65.30 a barrel this afternoon while West Texas Intermediate was down $2.40, or 3.8%, at $60.50 a barrel. 

In the immediate fallout from the attacks, state-owned producer Saudi Aramco told some Asian refiners it would meet its oil commitments, albeit with changes, sources said. 

The attacks on crude-processing facilities at Abqaiq and Khurais resulted in the largest single supply disruption in half a century, and threw into question Saudi Arabia's status as supplier of last resort. 

Some Asian refineries are expected to receive their allocated volumes for October, while other importers are being told of delays or being offered alternative grades. 

The prospect of oil releases from strategic inventories in the US, the International Energy Agency and countries such as Japan have weighed on prices, but the geopolitical threat of retaliation is causing concerns. 

US President Donald Trump said yesterday that it looked like Iran was behind the attacks, but stressed he did not want to go to war. 

Relations between the US and Iran have deteriorated since Trump pulled out of the Iran nuclear accord last year and reimposed sanctions on its oil exports. 

Tehran rejects the charges it was behind the strikes and on Tuesday ruled out talks with Trump. 

Saudi King Salman meanwhile called on governments around the world to confront the threats to oil supplies.