The attacks on critical oil production facilities in Saudi Arabia over the weekend will effectively wipe out the world's spare oil capacity, an expert from S&P Global Platts said on Monday. An oil processing facility at Abqaiq and the nearby Khurais oil field were attacked on Saturday, knocking out 5.7 million barrels of daily crude production — or 50% of the kingdom's oil output. That's more than 5% of global daily oil production. The country's national oil company, Saudi Aramco, has 35 to 40 days of supply to meet contractual obligations, according to a source close to the matter.

This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members. Alan Gelder Wood Mackenzie

Saudi Aramco reportedly aims to restore about a third of its output, or two million barrels, by Monday. "This heightens the risk premium, it puts a lot of pressure on the supply side," said Sarah Cottle, global head of market insight at S&P Global Platts. "This incident effectively eliminates the world's spare capacity," Cottle told CNBC's "Squawk Box" on Monday, though she added the longer-term outlook is bullish due to the immediate need to draw down on crude stockpiles. Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel. By 0940 GMT, the contract was at $65.77, up $5.55 or 8.4%. U.S. West Texas Intermediate (WTI) futures climbed as much as 15.5% to $63.34. The contract was later at $59.54, up $4.69 or 7.88%.

'Geopolitical risk premium' for oil markets

Cottle's view was also borne out by energy consultancy Wood Mackenzie. "This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members," wrote Alan Gelder, vice president for refining, chemicals and oil markets at Wood Mackenzie.

"A geopolitical risk premium will return to the oil price," Gelder said, in a note on Monday. Indeed, the prices of oil futures going into mid-2020 suggest that there's a risk premium being built into the market, said Leon Goldfeld, multi-asset portfolio manager at JP Morgan Asset Management. "Essentially you'll assume that whatever capacity's been hit will be back and running by the middle of next year," Goldfeld told CNBC. But "even then, the price has gone up, it's gone up by about 6%-7% rather than the 10% that we're seeing effectively in the spot market, so there is a risk premium being built by markets," Goldfeld said. Prior to the weekend attack, the oil market was focused on supply surpluses as well as slowing global growth concerns amid the U.S.-China trade dispute. Just last week, both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency this week said oil markets could end up with a surplus in 2020, despite an agreement by OPEC and its allies to limit supplies.

But if the outage in Saudi Arabia — one of the world's largest oil exporters — continues for a prolonged period of time, oil prices could easily rise over $80 a barrel, said S&P Global Platts' Cottle. Abqaiq is the world's largest oil processing facility and crude oil stabilization plant with a processing capacity of more than 7 million barrels per day. Prices could move far higher in the event of a prolonged outage or ratcheting up of tensions including retaliatory strikes, Cottle said. However, the upside may not be sustainable amid caution in the global economy, said Edward Bell, director of commodity research at Emirates NBD. "A price spike of Brent up to $70 a barrel is precisely what is not needed for the global economy at this stage," Bell told CNBC's "Street Signs." "It's not a global economy that can bear the oil price at $70 to $80 a barrel. So I would expect that even if we did have a spike and it was sustained there for a few weeks, the demand side reaction would again deflate that price move," Bell said.

US response is likely to be limited