Brent crude oil maintained its position near $113 on Tuesday buoyed by the unfolding crisis in Iran.
The commodity traded at $112.77 at 6:30 GMT as concern about supply interruptions intensified.
Islamic militants have seized control of much of Northern Iraq over the past week and look to be setting their sights on the nation's capital.
The Iraqi government declared a state of emergency and has bussed in trucks of volunteers to help defend the city from what is expected to be a bloody battle.
The rapidly deteriorating situation prompted Iraq to call for US aid, which the White House is considering. President Obama met with national security advisers on Monday to discuss options, but Obama has said he won't consider sending US troops into battle.
For the moment, oil prices are elevated due to concern rather than actual supply interruptions. Most of Iraq's oilfields are unaffected for the time being in the southern part of the country.
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However, as the conflict progresses, many worry that the nation's oil will eventually be affected. The Iraqi government has beefed up security surrounding the nation's oil infrastructure, and an interruption any time soon is unlikely. Still, CNBC reported that some analysts see Brent prices rising as much as $5.00 per barrel if the US intervenes with air strikes.
Also on the radar are talks between six world powers and Iran over Tehran's nuclear program. The two sides are working against the clock to come to a permanent agreement over Iran's nuclear development program, but the decade long dispute is proving difficult to resolve.
Although the two sides agreed to find a permanent solution by July 20, most expect that they will extend the deadline by six months.
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