The situation deteriorated rapidly after a series of armed incidents.
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The US side reported that Tehran fired cruise missiles at American warships and commercial vessels. It didn't take long for the White House to react.
“US forces shot down seven Iranian small boats,” said President Donald Trump, confirming the direct clash between the two countries' units.
However, Tehran presented a different version of events. An Iranian military official said Tuesday that two of the vessels attacked by the U.S., which killed five people, were civilian merchant ships.
Hormuz: a key artery under fire
Tensions around the Strait of Hormuz, which has remained almost completely closed since the US-Israeli war with Iran broke out in late February, have reached a crisis point. Donald Trump's announcement that US forces would begin to guide ships through the strait under military protection was met with an immediate and aggressive response from Tehran.
Iranian authorities have warned that they will attack any vessel attempting to transit this crucial waterway.
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Markets in the shadow of war. The price of oil remains high
The unrest in the Persian Gulf quickly translated into the situation on the commodity markets. Although oil prices saw a slight correction during the Asian session, the commodity retained most of its massive gains from the previous day, when it rose by 5.8 percent
Barrel of Brent crude oil cost on Tuesday $113.22 (decrease by 1.1%), WTI (West Texas Intermediate) recorded a decrease by 1.9 percent and the dollar American gained 0.1 percent in relation to the basket of major currencies.
Stock exchange reaction: anxiety in Europe and Asia
While markets in Japan, South Korea and mainland China were closed for public holidays, other markets responded with declines.
Futures contracts for the European Stoxx Europe 600 index fell by 0.4 percent, and the Hong Kong stock exchange (Hang Seng) lost 0.9 percent.
