Brent crude futures climbed nearly two per cent to reach $103.68 per barrel on Thursday afternoon, as ongoing tensions between Washington and Tehran in the Strait of Hormuz continued to rattle energy markets.
West Texas Intermediate also gained ground, rising more than one per cent to $94.51 per barrel.
The price increases followed Wednesday's session, which saw both benchmarks close over $3 higher amid larger-than-expected draws on US gasoline and distillate stocks, combined with a lack of progress in peace negotiations.
President Donald Trump extended a ceasefire between the two nations after Pakistani mediators intervened, though no end date has been announced, according to White House press secretary Karoline Leavitt.
Oil prices are jumping once again despite the President's efforts to bring the war to an end
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Despite the ceasefire extension, both countries continue to restrict vessel movements through the vital shipping lane, which handled approximately 20 per cent of global daily oil and liquefied natural gas supplies before hostilities commenced in late February.
Tehran tightened its control over the waterway on Wednesday by seizing two vessels.
Meanwhile, the US Navy has maintained its blockade of Iranian maritime trade, with American forces intercepting at least three Iranian-flagged tankers in Asian waters near India, Malaysia, and Sri Lanka, redirecting them away from their intended destinations.
Iranian parliament speaker Mohammad Baqer Qalibaf, the country's chief negotiator, stated that any comprehensive ceasefire would require the lifting of the American blockade.
MAPPED: Where is the Strait of Hormuz? | GB NEWSLATEST DEVELOPMENTS
Donald Trump has called for a regime change in Iran | GETTYThe conflict's economic ripple effects are becoming increasingly apparent across global markets.
Danni Hewson, AJ Bell's head of financial analysis, said: "It's tough for markets to stay positive as the price of Brent crude rises back above the psychologically important $100 a barrel mark."
American Airlines became the latest firm to highlight damage from surging fuel costs, which are eroding profits even as passenger demand remains strong.
British supermarkets also came under pressure on the Ftse 100, with Sainsbury's chief executive Simon Roberts echoing Tesco's earlier cautions that the energy shock will push food prices higher in coming months.
Brent crude oil prices are on the rise
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Ms Hewson noted that traders have shifted their attention away from social media pronouncements towards concrete developments on the ground.
She added: "As companies are now factoring in the impact of the war into earnings updates, it's clear this has gone way past the point where investors could hope things would get back to 'normal' in quick order."
The latest purchasing managers' index figures reveal cost inflation has surged to its highest level in three years.
Many businesses have responded by accelerating their orders, attempting to build up inventory before further price rises or potential shortages materialise.