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Oil prices rose sharply on Thursday after CBS News reported, citing an unnamed U.S. official that Iran's supreme leader Ayatollah Ali Khamenei approved last weekend's attack on Saudi Arabia's oil infrastructure.

The report came after U.S. Secretary of State Mike Pompeo called the attack on Saudi Arabia's oil installations an "act of war" against the kingdom by Iran.

Global benchmark Brent crude jumped 2.35 percent to $65.09 a barrel after a turbulent week, while U.S. West Texas Intermediate (WTI) crude futures were up 1.75 percent at $59.05 a barrel.

Iran denied involvement in high-stakes drone strikes on key Saudi Arabian oil facilities, but warned the U.S. it will retaliate immediately if it is targeted.

U.S. President Donald Trump, meanwhile, said he had ordered Treasury Secretary Steven Mnuchin to substantially raise sanctions on Iran.

Amid soaring regional tensions, Kuwait's army said Wednesday it was raising its readiness levels and carrying out military exercises.

"In view of the escalating situation in the country, the General Staff of the Army announces the lifting of the combat readiness of some of its units," it said in a statement.

In another development, the International Energy Agency has welcomed the statement made by Saudi Energy Minister Prince Abdulaziz bin Salman on bringing Saudi Arabia's suspended production back online, following Saturday's attacks.