Brent crude rose more than 3 percent and pushed back above $100 a barrel on Tuesday as mounting tension over Iran's nuclear program sparked concerns about supply threats, while hopes for economic stimulus also supported oil prices along with equities.

The U.S. crude contract settled more than 4 percent higher, while the rally sent Brent above $100 for the first time since June 11.

Iran said it had successfully tested missiles capable of hitting Israel in response to threats of military action against the Islamic Republic over its nuclear ambitions.

"I think this is positioning for geopolitical risk in the Middle East," said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis.

"Given that oil prices are low, buying in here is cheap portfolio insurance in case an event occurs," he added.

Brent prices have recovered from an 18-month low of $88.49 a barrel set on June 22, having retreated from the 2012 peak above $128 hit in early March.