Oil prices rallied Thursday, with the global benchmark finishing the session at its highest level since July, as tensions between the U.S. and Iran worsened — raising concerns over disruptions to the global flow of crude.

At a cabinet meeting Thursday, U.S. Defense Secretary Pete Hegseth said the military would be prepared to deliver “whatever this president expects of the War Department,” according to a report from Reuters, with Hegseth referring to the unofficial name that the Pentagon has revived for the Defense Department.

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“The escalating rhetoric against Iran raises the probability of military action which, combined with an Iranian response, could disrupt shipping in the Persian Gulf,” said Michael Lynch, president at Strategic Energy & Economic Research. “It also suggests that its oil exports might be blockaded, which would tighten markets significantly.”

Global benchmark Brent crude for March delivery BRNH26 tacked on 3.4% to settle at $70.71 a barrel on ICE Futures Europe, marking its highest finish since July 31, according to Dow Jones Market Data. U.S. benchmark West Texas Intermediate crude for March delivery CL.1 CLH26 climbed 3.5% to settle at $65.42 a barrel on the New York Mercantile Exchange, its highest finish since Sept. 26.

Prices had settled Wednesday at a four-month high as President Donald Trump renewed threats on Iran, pressuring it to reach a nuclear deal.

“If even a portion of Iranian supplies come off the market, that would be enough to sustain recent gains,” said Josh Young, chief investment officer at Bison Interests, an oil-and-gas investment firm. That could also lead to further gains, “depending how much more comes off and if other supplies are put at more direct risk,” he told MarketWatch.

In a post on social media Wednesday, Trump warned that a “massive armada” was headed toward Iran and urged the country to “negotiate a fair and equitable deal — NO NUCLEAR WEAPONS — one that is good for all parties.”

“Time is running out, it is truly of the essence!” he said in the post.

In response, Iran’s mission to the United Nations in New York posted on X that Iran was ready for dialogue, adding: “BUT IF PUSHED, IT WILL DEFEND ITSELF AND RESPOND LIKE NEVER BEFORE!”

“The timeline on a U.S. attack on Iran appears to be drawing near,” Robert Yawger, director of energy futures at Mizuho Securities USA, wrote in a note Thursday.

Read: Why oil experts say U.S.-Iran tensions feel different this time compared with previous crises

“A quick read-through of the mainstream press generally seems to tilt towards surgical strikes on the Iranian leadership, with the goal of forcing regime change,” he said. “Targets would include military bases used by the Revolutionary Guard and the Basij militia, ballistic missile sites and Iran’s nuclear program.” The U.S. launched air and sea strikes on three nuclear sites in Iran in June of last year.

Yawger said that one common theme early Thursday was that “diplomacy is making no progress.”

Iran produces around 3.3 million barrels per day of oil, with production “generally surviving multiple crisis over the years,” Yawger noted.

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