Meanwhile, negotiations between Russia and Ukraine continue to go nowhere: File Image/Pixabay

The continuation of overt hostilities between Iran and the U.S. despite the two countries supposedly making headway in nuclear negotiations caused oil to skyrocket by 4 percent on Wednesday, as traders leaned towards the possibility of supply disruptions rather than brokered peace.

Brent settled up $2.93, or 4.3 percent, at $70.35 per barrel; West Texas Intermediate settled up $2.86, or 4.5 percent, to $65.19.

The rally occurred after Israel raised its alert level on increased signs of a possible attack on Iran by the U.S., partly derived from the former stating it would temporarily shut parts of the Strait of Hormuz to conduct military drills.

Also, Eurasia Group told clients that there is a 65 percent probability of U.S. military strikes against Iran by the end of April.

Bjarne Schieldrop, chief commodities analyst at SEB, theorized that "Iran knows [U.S. president Donald] Trump's negotiation tactics now that a disruption in oil exports out of the Strait of Hormuz and a rally in oil prices to $150 per barrel is the very last thing Trump wants,.

"Iran has time to negotiate in calmness."

Also supporting oil on Wednesday was the failure of Russia and Ukraine to make any headway on a peace agreement after two days of talks in Geneva.

This caused John Kilduff, founding partner at Again Capital, to state, "There has been a renewed effort to clamp down on Russian exports, so if these talks do go off the rails as [Ukraine president Volodymyr] Zelenskiy suggested they are, then we could finally see a material drop in the amount of Russian exports headed to the global market, and that is obviously supportive."

For his part, Ole Hansen, head of commodities strategy at Saxo Bank, blamed Wednesday's rise in oil prices an Axios report stating that a U.S. military operation against Iran would likely last weeks, compared to the rapid operation that happened in Venezuela last month.

He said, "I'm a cynic and still don't believe Trump would risk higher pump prices at home in an election year where affordability is high on the agenda."