Oil prices have surged on a re-escalation of hostilities in the Middle East war after Iran closed the Strait of Hormuz at the weekend, just a day after reopening it, citing the United States’ blockade of its ports, AFP reports.

However, lingering hopes that a deal to end the seven-week crisis continued to support equities, even as Tehran said it was not currently planning to attend peace talks.

US benchmark West Texas Intermediate had dived more than 11 per cent and Brent shed 9pc earlier.

But both contracts jumped sharply today, days before the end of a two-week ceasefire, owing to the ongoing US blockade and after an American destroyer fired on and seized an Iranian ship that tried to evade it. Tehran warned it would retaliate.