Tensions between the United States and Iran escalated further as both sides confirmed that Iran shot down a US military drone today, aggravating worries of a direct conflict between the long-time adversaries.

US military officials confirmed that an Iranian surface-to-air missile shot down an unmanned naval surveillance drone in a southern coastal area along the Strait of Hormuz. The Iran Revolutionary Guard Corps (IRGC) insisted the “intruding spy drone” had violated Iran’s airspace and fell into Iran’s territorial waters. IRGC chief Maj. Gen. Hossein Salami characterized Iran’s action as a warning to Washington and said that while his country did not want to go to war against the United States, it was “completely and totally ready and prepared for war.” A spokesman for the US Central Command denied the drone had violated Iran’s airspace and called the attack “unprovoked.”

President Donald Trump upped the ante in a tweet: “Iran made a very big mistake!” he tweeted.

Why it matters: The incident comes amid a stewing standoff in the Persian Gulf where Japanese and Norwegian oil tankers have been struck in recent days. Crude prices jumped by 3% today hitting close to $64 per barrel, Reuters reported.