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Front-month Brent crude futures leapt by more than $5/bl in late afternoon trading in Asia on Monday, on unconfirmed reports that a US navy vessel had been hit by missiles near Iran's Jask island.
Two missiles struck a US Navy frigate that was sailing through the strait of Hormuz in violation of Iranian shipping rules, Iran's semi-official Fars news agency reported.
There was no immediate confirmation of the incident from US or independent sources.
The front-month July Brent contract on the Ice exchange traded as high as $114.30/bl after reports of the attack, up by 5.7pc from the close on 1 May. Futures then dropped back after US news agency Axios quoted an unnamed senior US official as denying any ship had been hit by missiles.
This was echoed by US Central Command (CENTCOM). "No US Navy ships have been struck," CENTCOM said on social media platform X. "US forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports," it added.
The reported attack came after US president Donald Trump on 3 May claimed that the US and Iran have agreed to allow some neutral ships stranded in the Mideast Gulf to leave the region.
The US' Project Freedom mission will support merchant vessels seeking to transit through the strait, US Central Command said. It does not appear to involve US naval escorts.
Iran has not confirmed any deal. Tehran's military command said today that any navigation through the waterway needed to be carried out in co-ordination with its armed forces.
