Oil prices soared more than seven percent to a four-year high above US$126 on Thursday after US President Donald Trump warned the blockade of Iranian ports could last months and a report said he would be briefed on potential fresh military strikes.

While Tehran submitted a fresh proposal this week to reopen the crucial Strait of Hormuz, Trump reportedly did not believe it was negotiating in good faith.

The Wall Street Journal said he had told national security officials to prepare for a long blockade to compel the Islamic republic to give up its nuclear programme.

At a meeting of oil executives on Tuesday, he discussed efforts "to alleviate global oil markets and steps we could take to continue the current blockade for months if needed and minimise impact on American consumers", a White House official said on condition of anonymity.

It came as Axios cited two unnamed sources as saying Admiral Brad Cooper, commander of US Central Command, would brief Trump on potential military action.

The briefing signals the president is considering resuming major combat operations – which were ended more than three weeks ago for talks – to try to break the logjam in negotiations or deliver a final blow before ending the war, Axios reported.

The outlet had earlier reported Trump as saying the blockade was "somewhat more effective than the bombing" and the naval action would not end until he had secured a deal to address Tehran's nuclear programme, it said.

In a post on his Truth Social platform, Trump wrote: "Iran can't get their act together. They don't know how to sign a nonnuclear deal. They better get smart soon!"

He posted an illustration of himself holding an assault rifle alongside the caption "NO MORE MR. NICE GUY!"

Still, Michael Brown at Pepperstone said: "It must be said that the heated rhetoric here doesn't really tally up with Trump's actions, which largely continue to point away from any sort of re-escalation at this stage.

"That said, while the broader direction of travel is one that continues to point towards a deal of some sort being done, it remains the case that negotiations do appear to be bogged down in a form of stalemate for the time being.

"In light of that, it seems that markets are slowly but surely moving from a 'no news is good news' mantra, to a 'no news is bad news' one."

Analysts said traders were beginning to shift to the view that the crisis will not be as short as initially hoped. (AFP)



Edited by Thomas McAlinden