President Donald Trump has rejected Iran’s proposal for a seven-day plan to reopen the Strait of Hormuz, as US officials say the naval blockade is strangling Tehran’s economy.

The Iranian plan, conveyed through Qatari mediators at the UN General Assembly, offered to reopen the strait and restart nuclear talks within seven days in exchange for lifting the blockade, releasing some $12 billion in frozen assets and easing oil sanctions.

‘I reject their proposal,’ Trump told reporters on September 26, saying Iran had overestimated its hand. He is reportedly willing to discuss sanctions relief only in exchange for a concrete nuclear deal.

US officials say Iranian oil exports have collapsed from 1.7 million barrels a day to about 260,000, while Gulf oil exports have recovered to 72 per cent of prewar levels.

Trump has also said he expects fresh strikes on Iran after the November midterms, keeping markets on edge as the war grinds into its eighth month.