Iran warned it could wage a prolonged war with the United States and Israel that would "destroy" the world economy, even as US President Donald Trump said late Wednesday the Islamic republic was facing imminent defeat.

The defiance from Tehran came as fighting around the strategic Strait of Hormuz -- the waterway carrying a fifth of the world's oil -- sent shock waves through energy markets, prompting emergency releases from global reserves and a limited draw on US stockpiles.

Oil prices have surged since 28 February, when the United States and Israel launched air strikes on Iran that killed its supreme leader and plunged the Middle East into conflict.

Retaliatory Iranian missile strikes and drone attacks have brought shipping through the strait almost to a halt, forcing governments to scramble to contain the fallout, while Trump said Iran was "pretty much at the end of the line."

"Doesn't mean we're going to end it immediately, but they are," Trump told reporters.