Oil prices jumped above $120 a barrel on Thursday amid renewed worries that the U.S.-Iran war could drag on longer than anticipated as Tehran maintains a chokehold on the Strait of Hormuz, a critical shipping route for 20 per cent of the global oil supply.

Already, President Donald Trump insisted that the U.S navy would continue with the blockade at the strait to pressure the Iranian government into giving up its nuclear ambitions and capitulation to the U.S. 

In an interview with Axios on Wednesday, Mr Trump indicated that the U.S. had no plans to back down from the conflict.

Brent crude initially leaped to $126 a barrel before settling at $116, pushing petrol prices in the U.S. to about $4.30 per gallon, while diesel rose to $5.50. Before the war, Brent crude was around $72 per barrel.

The U.S. and Iran have continued to clash over control of the strait as Iran declined to send representatives to Pakistan for negotiations last week.

U.S. Vice-President J.D. Vance similarly aborted plans to fly to Islamabad after learning of Iran’s unwillingness to engage.

Mr Trump said he recalled the vice-president, noting that negotiations could be made over the phone while maintaining that the U.S. has the upper hand.