Oil prices were hovering near seven-month highs on Wednesday as the threat of military conflict ​between the US and Iran ​that could disrupt supply continued ​to worry investors as talks between the parties are set for Thursday, reported Reuters.

Brent prices reached their ⁠highest since July 31 while WTI hit its highest since ⁠August 4 on Monday, and both contracts have held near there as the US has positioned military forces in the Middle East to compel Iran to negotiate an end to its nuclear and ballistic missile programme.

An extended conflict could disrupt supplies ‌from Iran, the third-biggest crude producer in the Organization of the Petroleum Exporting Countries, and other countries in the key Middle East producing region, said the report.

"This uncertainty means the market will continue ​to price in a large risk premium and remain sensitive to any fresh developments," ING commodities strategists said on Wednesday.

US envoys Steve Witkoff and Jared Kushner are slated to meet with an Iranian delegation for a third round of talks on Thursday in Geneva. Iran’s Foreign Minister ⁠Abbas Araqchi said on Tuesday that a deal with the US was 'within reach, but only if diplomacy is given priority.'

″Trump has warned that without a deal, there will be ‘very ‌bad consequences’. Whether (Iran’s) concessions will meet the US's ‘zero enrichment’ red line remains to be seen,” Tony Sycamore, IG market analyst, said in a note.