World

US urges both Vietnam, China to use restraint in their standoff over oil rig in disputed sea

  • In this photo released by Vietnam Coast Guard, a Chinese ship, left, shoots water cannon at a Vietnamese vessel, right, while a Chinese Coast Guard ship, center, sails alongside in the South China Sea, off Vietnam's coast, Wednesday, May 7, 2014. Chinese ships are ramming and spraying water cannons at Vietnamese vessels trying to stop Beijing from setting up an oil rig in the South China Sea, according to Vietnamese officials and video evidence Wednesday, a dangerous escalation of tensions in disputed waters considered a global flashpoint. (AP Photo/Vietnam Coast Guard)

    In this photo released by Vietnam Coast Guard, a Chinese ship, left, shoots water cannon at a Vietnamese vessel, right, while a Chinese Coast Guard ship, center, sails alongside in the South China Sea, off Vietnam's coast, Wednesday, May 7, 2014. Chinese ships are ramming and spraying water cannons at Vietnamese vessels trying to stop Beijing from setting up an oil rig in the South China Sea, according to Vietnamese officials and video evidence Wednesday, a dangerous escalation of tensions in disputed waters considered a global flashpoint. (AP Photo/Vietnam Coast Guard)  (The Associated Press)

  • In this video image released by Vietnam Coast Guard, Vietnamese surveillance ship crew members stand near the side of the ship, allegedly damaged after being rammed by a Chinese ship, in the South China Sea, off Vietnam's coast, Wednesday, May 7, 2014. Chinese ships have been ramming into and firing water cannons at Vietnamese vessels trying to stop Beijing from putting an oil rig in the South China Sea, according to officials and video footage Wednesday, in a dangerous escalation of tensions over waters considered a global flashpoint. (AP Photo/Vietnam Coast Guard)

    In this video image released by Vietnam Coast Guard, Vietnamese surveillance ship crew members stand near the side of the ship, allegedly damaged after being rammed by a Chinese ship, in the South China Sea, off Vietnam's coast, Wednesday, May 7, 2014. Chinese ships have been ramming into and firing water cannons at Vietnamese vessels trying to stop Beijing from putting an oil rig in the South China Sea, according to officials and video footage Wednesday, in a dangerous escalation of tensions over waters considered a global flashpoint. (AP Photo/Vietnam Coast Guard)  (The Associated Press)

A visiting U.S. official called on Vietnam and China to practice restraint in their standoff over Beijing's oil rig in the disputed South China Sea, warning that the global economy was too fragile to deal with conflict.

In a sign of the jitters, Vietnam's main stock market index recorded its biggest one-day drop since 2001 on Thursday.

On Wednesday, Vietnam said Chinese ships escorting a giant oil rig close to the Paracel Islands had repeatedly rammed Vietnamese vessels in the most serious incident between the two countries in years.

U.S. State Department official Daniel Russel urged both sides to "refrain from unilateral actions."

He told reporters that the global economy was "too fragile to brook the possibility of a crisis that could escalate into conflict."