From the AP -
The U.S. Navy says a Defense Department contractor's ship fired flares and warning shots at two small boats approaching it in the Persian Gulf.
Fifth Fleet spokeswoman Cmdr. Lydia Robertson says the Western Venture was in international waters in the central Persian Gulf when it was approached by two small boats of unknown origin. ...The Navy official said Friday the ship fired flares and warning shots with .50-caliber machine guns and M-16s at the boats, causing them to leave the area. ...Robertson says the Iranian Coast Guard radioed the Western Venture a few minutes later to determine its identity. ...Oil prices rose sharply on news reports that said the small boats were Iranian.