Oil prices spiked sharply in response to reports from Iranian state media that two missiles hit a US warship as it tried to enter the Strait of Hormuz.

The Brent crude benchmark price soared by more than $4 per barrel within minutes of the news breaking, to hit $114, more than 5% up on the day's opening price.

It fell back slightly after the US denied the strike took place.

Late last night, Donald Trump announced a plan to escort stuck vessels out of the Gulf, calling it a "humanitarian gesture".

If the attempt to sail ships through the straits leads to another outbreak of hostilities, that would reduce the chances of flows of oil and gas resuming and be likely to send oil prices soaring even further.

-BBC