Crude oil held above $84 per barrel on Thursday after rallying more than 6% in the previous session, underpinned by renewed fighting between the US and Iran that threatened further disruptions to global energy supplies.
President Donald Trump pledged a strong response after an attack on US forces in Jordan.
Meanwhile, both sides continued to struggle to reach a potential deal as Tehran insisted on maintaining control over the Strait of Hormuz.
The conflict has also expanded beyond Hormuz into the Red Sea, where Iran-backed Houthi rebels in Yemen threatened to blockade Saudi Arabia, prompting Riyadh to join US forces in striking targets in Iraq associated with Tehran-backed militants.
In the US, commercial crude inventories recorded their largest draw since mid-June, reinforcing signs of a tightening physical market.
The nation’s strategic petroleum reserves also fell for an 18th consecutive week, reaching their lowest level since 1983.