Oil prices have jumped more than 2 per cent after Iran’s Islamic Revolutionary Guard Corps says it has targeted a US airbase, in response to an earlier American attack in the port city of Bandar Abbas, Reuters reports.

Brent crude futures were up $2.85, or 3pc, to $97.14 a barrel at 1150 GMT, while the more active August contract gained $2.81 or around 3.1pc, to $95.06. The July contract is set to expire on Friday.

US West Texas Intermediate futures were up $2.76, or 3.1pc, at $91.44.

Both benchmarks had slipped more than 5pc to touch their lowest in a month in the previous session on the possibility of a US-Iran deal to end the war and reopen the Strait of Hormuz.