Oil prices have risen about 1 per cent after renewed fighting broke out between the US and Iran, Reuters reports.

Brent crude futures are up $1.20, or 1.2pc, at $101.26 a barrel as of 0356 GMT. West Texas Intermediate (WTI) US crude futures rose by 85 cents, or 0.9pc, to $95.66 a barrel. The benchmarks were up more than 3pc at market open.

The gains snapped three days of decline on reports this week that the US and Iran were close to agreeing to a peace deal that would end the fighting but put off larger issues around Iran’s nuclear programme. For the week, both contracts are still set to fall about 6pc.

“The market is on the cusp of a complete breakdown. Price formation is no longer anchored in a pragmatic reading of the war’s trajectory or the physical realities in the Strait of Hormuz,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.