Iran preparing to stage massive military exercise in Gulf, US officials say

Iran is expected to stage a major military exercise in the Persian Gulf in the next two days, perceived to be aimed at demonstrating its ability to close a strategic oil shipping lane, as tensions with the US escalate.

The US military's Central Command confirmed to Reuters that it has seen an increase in Iranian activity, including in the Strait of Hormuz, a strategic waterway for oil shipments that Iran's Revolutionary Guards have threatened to block.

"We are aware of the increase in Iranian naval operations within the Arabian Gulf, Strait of Hormuz and Gulf of Oman," said Navy Captain Bill Urban, the chief spokesman at Central Command, which oversees US forces in the Middle East.

"We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways," Urban added.

US officials, speaking to Reuters on condition of anonymity, said Iran's Revolutionary Guards have appeared to prepare more than 100 ships for exercises, with hundreds of ground troops possibly being involved.

They said the drills, which typically happen much later in the year, could begin within the next 48 hours, although the precise timing was unclear.

Iran has been furious over President Donald Trump's decision in May to withdraw from the landmark 2015 nuclear deal and reimpose sanctions on Tehran. Washington has since told countries they must stop buying the OPEC producer's oil from November or face financial consequences.

However President Hassan Rouhani and other senior Iranian officials have warned the country would not easily yield to a renewed US campaign to halt Iran's vital oil exports and threatened to close the Strait of Hormuz through which one third of the world's oil supply passes.

The impending sanctions have already put significant pressure on Iran's economy. The rial has lost more than half of its value against the dollar in the past four months, when the countdown to a resumption of US sanctions on 7 August began.

Trump has boasted that his role in starting sanctions has sparked strikes and popular demonstrations against the Tehran government and shortages, unemployment, and falling living standards witnessed across Iran.