08:48 AM EDT, 06/19/2025 (MT Newswires) -- Oil rose to a fresh five month high early on Thursday, continuing to add a risk premium as Israel and Iran trade air strikes while U.S. President Donald Trump mulls entering the fray.

With U.S. markets closed for the Juneteenth holiday, West Texas Intermediate crude oil rose US$1.09 to US$76.23 per barrel in electronic trade, the highest since Jan.17, while August Brent crude was up US$0.97 to US$77.67.

The rise comes as Israel and Iran continue to trade attacks, with an Iranian missile on Thursday hitting an Israeli hospital while Israel struck a heavy-water reactor in Iran.

With the conflict in its seventh day, Donald Trump is considering joining Israel in order to force Iran to end its nuclear program. The Wall Street Journal reported Trump has approved an attack plan but has not made a final decision on whether to launch a strike.

The war has not yet affected oil shipments from the Persian Gulf region, which supplies around 20% of global demand. Still, oil prices have climbed 12% since Israel launched its "Operation Rising Lion" to end Iran's nuclear ambitions as traders price in the risk of a supply disruption should Iran decide to block shipping in the Strait of Hormuz.

"With Iran vowing to respond with missiles and drone attacks and rising fears of US involvement in strikes on Tehran and its underground nuclear facilities, the escalation has once again raised fears of broader conflict in a region ... Tensions around the Strait of Hormuz-through which over 20 million barrels of oil transit daily-are the main focus," Ole Hansen, head of commodity strategy at Saxo Bank wrote.

Thursday's rise also comes a day after the Energy Information Administration reported U.S. commercial oil inventories fell by a more than expected 11.5-million barrels last week, while the consensus estimate among analysts polled by Reuters expected a drop of 1.8-million barrels, a sign of high summer demand.