Brent North Sea crude, the main international benchmark, rose by nearly two percent to $96.13 a barrel, while the main US contract, WTI, increased by 1.75 percent to $90.23 a barrel.

The higher prices followed Wednesday's declines on the hopes of an imminent deal to avoid further hostilities in the Mideast war, which has halted shipping through the crucial Strait of Hormuz for months.

An American official said Thursday morning Hong Kong time that the US military had shot down four Iranian drones and struck a control centre in the southern city of Bandar Abbas.

On Wednesday, an Iranian Revolutionary Guards official had said that renewed war with the United States was unlikely but warned that Iran stood ready against any attack.