(Bloomberg) -- Oil rose for a fourth day on escalating tensions in the Middle East after blowing past the $90-a-barrel threshold in the previous session.

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Global benchmark Brent climbed above $91 to near the highest level since October, while West Texas Intermediate was close to $87. Israel has increased preparations for a potential retaliation by Tehran after it struck an Iranian diplomatic compound in Syria, stoking fears of a wider regional conflict.

Crude has surged by 18% this year amid geopolitical tensions in the Middle East and Ukraine, as well as OPEC+’s supply restrictions and healthy demand. The conflict between Israel and Hamas had led to Houthi attacks on shipping in the Red Sea, pushing up transport costs, but has so far not escalated into a wider war in a region that accounts for around a third of the world’s oil supply.

Cease-fire talks between Israel and Hamas — which could see the release of hostages held in Gaza — remain deadlocked. Israel’s economy minister said he doesn’t trust Qatar to act as a mediator with Hamas, designated a terrorist organization by the US and Europe.

“The wider Mideast tensions stemming from the Gaza war are probably at the highest in months,” said Vandana Hari, founder of Vanda Insights in Singapore. “Crude is reflecting that Mideast conflagration fear premium.”

Earlier this week, OPEC+ chose to stick with supply cuts for the first half of the year, keeping global markets tight and buttressing the case for higher prices. A panel of key members led by Saudi Arabia recommended no policy changes at an online review meeting. That means roughly 2 million barrels a day of output curbs will remain in place.



Market watchers have become more bullish in recent weeks. JPMorgan Chase & Co. said Brent has the potential to rally to $100 a barrel this year if Russia’s decision to cut production wasn’t balanced out by other counter-measures. ANZ Banking Group Ltd., meanwhile, raised its three-month outlook to $95.

Some oil gauges are signaling further advances. Timespreads are strengthening, while call options — which profit when oil prices rise — are trading at a premium over the opposite put options. Money managers have also been increasing their net-long positions.

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