US and Iran having 'very good discussions', Trump says

US President Donald Trump's administration has had "very good discussions" with Iran during all-day negotiations, fuelling expectations of an imminent end to the five-month conflict.

Oil prices fell and stocks jumped in Asian trade on Wednesday after Wall Street hit record highs on hopes that a deal could soon be reached to restore traffic through the blockaded Strait of Hormuz.

"They had an all-day negotiation," Trump told Fox News.

The Strait of Hormuz "is going to be open very soon", Trump said.

The US president again threatened to hit Iran "really hard" if a deal isn't reached.

"If they back out again, they are going to get hit really hard."

Trump has often threatened massive strikes if Tehran did not reach an agreement and then cited progress in talks that have so far failed to end hostilities.

Axios, citing two regional sources and a US official, reported the US and Iran were closing in on an interim agreement to reopen the strait with the agreement of Oman, which controls part of the waterway.

The report said Washington was aiming for an announcement on Wednesday (Thursday AEST).

However, Iranian state media, citing an informed source, said an agreement with Oman on the strait, which usually carries about a fifth of global oil and liquefied natural gas shipments, would be delayed "as long as the United States continues to threaten Iran".

Trump has yet to achieve the objectives he set out at the start of the war: dismantling Iran's nuclear program, curbing its ability to attack regional rivals and creating conditions for Iranians to overthrow their clerical rulers.

Iran has halted most traffic through Hormuz while Washington maintains a blockade of Iran-related shipping and ports.

Iran's foreign ministry said talks with Oman over transit through the strait were positive and continuing, and were focused on establishing safe shipping lanes, state media reported.