The Western Venture was in international waters in the central Gulf on Thursday morning when it was approached by two small boats of unknown origin, said Cmdr. Lydia Robertson, a spokeswoman for the U.S. Navy's Fifth Fleet.

"Following proper procedures, Western Venture issued standard queries to the small boats via bridge-to-bridge radio but received no response," said Robertson. "Western Venture then activated a flare but again did not receive a response."

The small boats continued toward the ship, and the ship's security team fired warning shots with .50-caliber machine guns and M-16s into the water in front of the boats, causing them to leave the area, said Robertson.

A unit that identified itself as an Iranian Coast Guard vessel radioed the Western Venture a short time after the incident to determine its identity, said Robertson.

"It is not clear if this was one of the small boats or a separate boat," Robertson said.

Oil prices rose sharply on news reports that the boats fired upon were from Iran. Iran's official Arabic language television station, Al-Alam, said that the small boats involved in the incident were not Iranian, citing an unidentified Iranian navy official.

The Western Venture was carrying military cargo on its way to Kuwait, said Robertson.

Five small Iranian boats swarmed three U.S. warships in the Gulf's narrow Strait of Hormuz in early January. The U.S. commanders did not fire any warning shots despite hearing a radio call saying the boats would explode, and the Iranians eventually retreated.

In mid-December, a U.S. ship fired a warning shot at a small Iranian boat that came too close in the Strait of Hormuz, causing the Iranians to pull back.

(This version CORRECTS that one flare, not multiple flares, was fired.)