Smoke billows from the Aramco oil facility in Abqaiq (Picture: PA Images).
Former defence secretary Liam Fox has said that military action against Iran cannot be ruled out following the drone attack on Saudi Arabia oil installations on Saturday.
Speaking on BBC Radio 4's Today Programme, Dr Fox said he believed it was becoming increasingly clear that Iran is to blame for the attacks.
He said: "Increasingly, looking at the intelligence sources we have, it seems that is the case."
On whether military action should be taken, Dr Fox added: "You can't rule anything out, nobody wants to see that - Iran haven't ruled military involvement out to its neighbours.
"I think it's difficult to rule out military action."
The attacks targeted Abqaiq, the site of the world's largest oil processing plant, run by the Saudi state oil company, Aramco, and the Khurais oilfield.
Iran denies involvement in Saturday's air attacks, which were claimed by Iran-aligned Houthi rebels in Yemen.
Dr Fox added: "We have seen a constant destabilisation in the region - it now looks as though there might have been a direct attack on one of our allies in Saudi Arabia."
He continued: "This is a serious situation and we've got to use all the levers we can at this present time as the situation is getting out of hand... It's also affecting the global economy if Iran continues."
The newly-appointed Saudi ambassador to London, Prince Khalid Bin Bandar Al-Saud, described the drone strike on Saudi Arabia's oil installations as an attack on the global economy and "certainly Iranian-backed".
US Secretary of State Mike Pompeo also blamed Iran at the weekend, without providing any evidence, prompting Tehran to accuse Washington of deceit.