Oil prices rose on Thursday, driven by increasing ‌concerns over potential military conflict between the United States and Iran as both countries stepped up military activity in the oil-producing ​region.

Brent futures were up $1.11, or 1.58%, at $71.46 a barrel by 0905 GMT while U.S. West Texas Intermediate (WTI) crude gained $1.05, or ​1.6%, to $66.24.

Both ​benchmarks neared six-month highs on Thursday after advancing more than 4% on Wednesday as traders priced in the risk of supply disruptions in the event of conflict.

"Oil prices are rallying as ⁠the market becomes increasingly concerned over the potential for imminent U.S. action against Iran," ING analysts said in a note.

"For oil markets, the concern is clearly what action would mean, not only for Iranian oil supply, but also broader Persian Gulf oil flows, given the risk of disruption to shipments through the Strait ​of Hormuz."

Iranian state ‌media reported that ⁠the country shut ⁠down the Strait of Hormuz for a few hours on Tuesday without making clear whether the waterway had reopened fully. ​About 20% of global oil supply passes through the waterway.

A degree of ‌progress was made during Iran talks in Geneva this week, but ⁠distance remained on some issues, the White House said on Wednesday, adding that it expected Tehran to come back with more details in a couple of weeks.

Iran issued a notice to airmen (NOTAM) that it plans rocket launches in areas across the south of the country on Thursday from 0330 GMT to 1330 GMT, according to the U.S. Federal Aviation Administration website.

At the same time, the U.S. has deployed warships near Iran, with U.S. Vice President JD Vance saying that Washington was considering whether it should continue diplomatic engagement with Tehran or pursue another option.

Meanwhile, two days of peace talks in Geneva ‌between Ukraine and Russia ended on Wednesday without a breakthrough, with Ukrainian President ⁠Volodymyr Zelenskiy accusing Moscow of stalling U.S.-mediated efforts to end the ​four-year-old war.

U.S. crude and gasoline and distillate inventories fell last week, market sources said, citing American Petroleum Institute figures on Wednesday. That was contrary to expectations in a Reuters poll that crude stocks would rise by 2.1 ​million barrels in the ‌week to February 13.

Official U.S. oil inventory reports from the Energy Information Administration ⁠are due on Thursday.

(Reporting by Enes ​Tunagur in London Additional reporting by Yuka Obayashi and Emily Chow Editing by David Goodman)