WRAPUP 2-Ship hired by US military fires warning shots in Gulf

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By Kristin Roberts

WASHINGTON, April 25 (Reuters) - A cargo ship hired by the U.S. military fired warning shots at approaching boats in the Gulf, the U.S. Navy said on Friday, underscoring tension in the region as the Pentagon sharpened its warnings to Iran.

According to American defense officials, the Westward Venture cargo ship chartered by the U.S. Defense Department was traveling in international waters when two unidentified small boats approached on Thursday.

After the boats failed to respond to radio queries and a warning flare, the cargo ship's security team fired "a few bursts" of machine gun and rifle warning shots, according to Cmdr. Lydia Robertson, a spokeswoman for the U.S. Navy's Bahrain-based Fifth Fleet.

"The small boats left the area a short time later," she said by telephone. "They were able to avoid a serious incident by following the procedures that we use."

The news helped push oil prices up more than $3 to $119.50 a barrel -- within striking distance of the record $119.90 hit earlier this week -- as traders worried escalating tensions in the region could eventually disrupt crude shipments.

U.S. defense officials, speaking only on condition of anonymity, first said they suspected the boats were Iranian.

But a Fifth Fleet spokeswoman quickly backed away from that charge.