Oil prices surged more than 2 per cent on Thursday over fears of a possible conflict between Iran and the US as Tehran's Islamic Revolution Guards Corps (IRGC) said that it had shot down an "intruding" US spy drone.
Brent crude, the global oil benchmark, was up by 2.23 per cent at $63.20 a barrel.
In the statement issued earlier on Thursday, the IRGC said the US-made Global Hawk surveillance drone was brought down by its Air Force near the Kouh-e Mobarak region after the aircraft violated Iranian airspace, a Press TV report said.
The US military has however, denied flying the drone over the Iranian airspace.
Oil market has been volatile off-late owing to the tension in the Persian Gulf.
The Brent jumped nearly 4 per cent over the June 13 attacks on the two oil tankers in the Gulf of Oman.