Oil prices have risen and stocks have slumped after fresh attacks between the US and Iran which threaten to lengthen disruption in the Strait of Hormuz.The price of Brent crude oil was up by as much as 3% on Wednesday morning to around 76 US dollars a barrel, climbing to a two-week high.Prices have been coming down in recent weeks after US president Donald Trump declared a ceasefire deal had been reached with Iran and that the Strait of Hormuz would reopen.The initial deal secures safe, toll-free passage of the strait for 60 days, pending the outcome of a final agreement on Tehran’s disputed nuclear plans.But the agreement was threatened after Iran targeted tankers transiting through the waterway, which is central to negotiations seeking a permanent end to the war.US forces said they had launched “over 80” strikes on Iranian targets in response, and Iran said it had retaliated with strikes against Bahrain and Kuwait.The US also reimposed sanctions on Iranian oil, after waiving them as part of the interim ceasefire.Richard Hunter, head of markets at Interactive Investor, said: “Reports of an Iranian attack on a liquefied natural gas tanker in the Strait of Hormuz was followed by retaliatory US strikes in the region, leading to a spike of more than 3% in oil prices.“The US also reimposed crude oil sales sanctions on Iran, all of which casts real doubts on the longer-term outlook for peace in the Middle East.”A sell-off had swept across European stock markets on Wednesday.The UK’s FTSE 100 index was down by around 1.2% to 10,532 points in morning trading.Defence giant Babcock was the biggest faller with losses of nearly 4%, while BAE Systems was also down by about 2.5%.Energy giants BP and Shell were among a handful of stocks making gains amid the rebound in oil prices.Germany’s Dax was down about 1.1%, and France’s Cac 40 was 0.9% lower.