Oil prices jumped on Thursday after a report that the United States is considering the possibility of new military action against Iran to break the deadlock in negotiations aimed at ending the war.
These fears have been exacerbated by fears of further disruptions to the Middle East's supply.
Oil Price Today
Brent crude futures for June delivery rose more than $8 to $126.09 a barrel after posting a 6.1% gain in the previous session.
The most-traded July contract was $113.10, up $2.66, or 2.4%, after posting a 5.8% gain in the previous session.
U.S. West Texas Intermediate crude futures for June rose $2.42, or 2.3%, to $109.30 a barrel, after rising 7% in the previous session.
Both indices are on track for gains for the fourth month in a row.
Trump's briefing and oil
According to a report published by Axios late on Wednesday, US President Donald Trump is scheduled to receive a briefing on Thursday about plans to launch a series of military strikes on Iran in the hope that it will return to negotiations over its nuclear program.
A White House official said on Wednesday that Trump had spoken with oil companies about how to mitigate the impact of the U.S. blockade of Iranian ports if it lasted for months, raising concerns in the market that oil supplies could be disrupted for a long time.
"The prospects for a near resolution of the Iran conflict or the reopening of the Strait of Hormuz remain slim," IG market analyst Tony Sycamore said in a note.
The meeting with oil companies came as efforts to resolve the conflict, which has killed thousands and caused what analysts say is the world's biggest energy supply disruption ever, has reached an impasse.
OPEC Alliance Decision
On the supply front, sources told Reuters that the OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC allies, is likely to agree on Sunday to slightly increase oil production quotas by about 188,000 barrels per day.
The meeting comes immediately after the UAE's exit from OPEC in a strategic step during which it affirmed its commitment to strengthening the relationship with its partners and its adherence to production flexibility and market stability.