Oil prices hit 4-month high with markets 'rapidly repricing geopolitical risk' as Iran tensions flare

Crude oil prices rose Thursday to reach their high levels since September after the Trump Administration warned Iran may face military strikes if the country does not negotiate a new nuclear agreement.

The price of Brent crude oil jumped as much as 4.3% to briefly cross $70 per barrel for the first time since September before paring gains. The US pricing benchmark, West Texas Intermediate  crude, gained as much as 4.7% to trade above $65 at its highs of the day.

The gains add to a run-up over the past month that has seen oil rise roughly 15% as geopolitical risk premiums and record cold weather in the US have buoyed prices.

"Oil markets are rapidly repricing geopolitical risk as the probability of direct US action against Iran rises," said Rystad Energy head of geopolitical analysis Jorge Léon.

"The speed of the oil price reaction suggests markets see US military action against Iran as a real, near-term risk.”