Iran said on Thursday it would respond with "long and painful strikes" on U.S. positions if Washington renewed attacks, and also reasserted its control over the Strait of Hormuz, complicating U.S. plans for a coalition to reopen the waterway.
Two months into the US-Israeli war with Iran, the vital sea channel remains closed, choking off 20% of the world's oil and gas supplies. That has sent global energy prices surging and heightened concerns about the risks of an economic downturn.
Efforts to resolve the conflict have hit an impasse, with a ceasefire in place since April 8 but Iran still blocking the strait in response to a U.S. naval blockade of Iran's oil exports, the country's economic lifeline.
U.S. President Donald Trump is slated to receive a briefing on Thursday on plans for a series of fresh military strikes on Iran to compel it to negotiate an end to the conflict, a U.S. official told Reuters.
Such options have long been part of U.S. planning but the proposed briefing, first reported by news site Axios late on Wednesday, spurred big gains in oil prices, with the benchmark Brent crude contract LCOc1 hitting more than $126 a barrel at one point. It later slipped back to around $113 a barrel.
Any U.S. attack on Iran, even if limited, will usher in "long and painful strikes" on U.S. regional positions, a senior Revolutionary Guards official said.
"We've seen what happened to your regional bases, we will see the same thing happen to your warships," Aerospace Force Commander Majid Mousavi was quoted by Iranian media as saying.
Iran aims to maintain its hold over the Strait
Supreme Leader Mojtaba Khamenei said in a written message to Iranians that Tehran would eliminate "the enemies' abuses of the waterway" under new management of the strait, indicating that the country intended to maintain its hold over it.
"Foreigners who come from thousands of kilometres away...have no place there except at the bottom of its waters," he said.
Brent prices have doubled since the war began on February 28, driving inflation and sending pump prices to politically painful levels worldwide.
U.N. Secretary-General Antonio Guterres warned that if the disruption caused by the closure dragged on through mid-year, global growth would fall, inflation would rise and tens of millions more people would be pushed into poverty and extreme hunger.
"The longer this vital artery is choked, the harder it will be to reverse the damage," he told reporters in New York.
As well as blocking almost all but its own shipping through the strait, Iran launched drones and missiles at Israel and U.S. bases, infrastructure and U.S.-linked companies in Gulf states.
Amazon AMZN.O said restoring normal operations for its cloud regions in Bahrain and the United Arab Emirates could take months after damage last month from the conflict, which has killed thousands in Iran and across the Middle East.
Another plan to be shared with Trump involves using ground forces to take over part of the Strait of Hormuz to reopen it to commercial shipping, Axios said. Trump is also considering extending the U.S. blockade on Iran or declaring a unilateral victory, officials have said.
In a sign the U.S. was also envisaging a scenario where hostilities cease, the State Department cable invited partner countries to join a new coalition called Maritime Freedom Construct (MFC) to enable ships to navigate the strait.
"The MFC constitutes a critical first step in the establishment of a post-conflict maritime security architecture for the Middle East," said the cable, which was due to be delivered orally to partner nations by May 1.
France, Britain and other countries have held talks on contributing to such a coalition but said they were willing to help open the Strait only when the conflict ends.
Japan speaks to Iran about safe passage through strait
Mediator Pakistan was trying to avoid escalation while the two sides exchange messages on a potential deal, a Pakistani source said on Wednesday. Trump has said Iran cannot have a nuclear weapon, while Tehran says its nuclear ambitions are peaceful.
Iran's latest offer for resolving the war, suspended since April 8 under a ceasefire deal, would set aside discussion of its nuclear program until the conflict is formally ended and shipping issues resolved.
The Pakistani source said the United States had shared "observations" on the Iranian proposal and it was now up to Iran to respond.
"(The) Iranians asked for time till the end of the week," the source told Reuters.
German Chancellor Friedrich Merz said Tehran should stop playing for time, and Japanese Prime Minister Sanae Takaichi said she had spoken to Iranian President Masoud Pezeshkian to ensure the safe passage of a Japanese-related vessel and all others through the strait.
Pezeshkian told Takaichi that Tehran would resume the path of diplomacy once Washington changed its behaviour.
Weeks of conflict have strained the Iranian economy but analysts said its ruling clerics and Revolutionary Guards could use their iron grip on the country to hold out.
