"We will be taking Kharg Island and other oil infrastructure points, and assume total control of their oil and gas markets," warned the U.S. President, as hostilities flare amid tit-for-tat strikes.

Oil ​prices settled lower on Thursday after U.S. President Donald Trump canceled plans to strike Iran ‌within hours, a move that raised expectations for a deal to end more than three months of war.

Dramatic reversal comes hours before expected strikes, but details of diplomatic developments not immediately clear

In renewed fighting overnight, the US launched strikes on Iranian targets as "punishment" for attacks on tankers in the Strait of Hormuz. Iran has targeted US military sites in Bahrain and Kuwait in retaliation.