Oil prices rose 1.5 per cent on Thursday, extending gains for a third day, on increasing concerns the US may carry out a military attack on key Middle Eastern producer Iran that could disrupt supply from the region.

Brent crude futures rose 94 cents, or 1.4pc, to $69.34 a barrel by 07:30 GMT. US West Texas Intermediate crude climbed 92 cents, or 1.5pc, to $64.13 a barrel.

Both contracts have climbed about 5pc since Monday and are at their highest since September 29.

Prices are rising as US President Donald Trump has increased pressure on Iran to end its nuclear programme with threats of military strikes and as a US naval group has arrived in the region. Iran is the fourth-largest producer among the Organization of the Petroleum Exporting Countries with output of 3.2m barrels per day.

Trump is considering options to attack Iranian security forces and leaders to inspire protests to potentially topple the current regime, Reuters reported on Thursday, citing US sources familiar with the discussions.

“The main driver of oil prices remains geopolitical risk premium surrounding Iran and the Middle East, though unplanned outages in Kazakhstan and US (Winter Storm Fern) have had temporary impact as well,” DBS Bank’s energy sector team lead Suvro Sarkar said in an email.

The huge Tengiz oilfield in Kazakhstan is being restarted in stages after electrical fires cut output last week, with the aim of reaching full production in a week.

In the US, the world’s biggest oil producer and largest liquefied natural gas exporter, crude and gas producers were bringing wells back online following disruptions from severe cold from Winter Storm Fern that hit over the weekend.

A surprise draw in US crude inventories, which temporarily eased concerns of excess supply, also supported prices, said Phillip Nova’s senior market analyst Priyanka Sachdeva.

US crude inventories fell by 2.3m barrels to 423.8m barrels in the week ended January 23, the Energy Information Administration said on Wednesday, compared with analysts’ expectations in a Reuters poll for a 1.8m barrel rise.

Some analysts are forecasting higher prices because of the Iranian concerns.

“The potential for Iran getting hit has escalated the geopolitical premium of oil prices by potentially $3 to $4 (per barrel),” analysts at Citi said in a note on Wednesday.

They added that further geopolitical escalation could push prices to as high as $72 a barrel for Brent over the next three months.