The Trump administration is considering plans to occupy or blockade Iran's Kharg Island amid the Strait of Hormuz crisis, according to reports

Donald Trump is mulling plans to seize the small Gulf island that is central to Iran’s oil export system, according to US sources.

The Trump administration is said to be weighing options to occupy or blockade Kharg Island in a bid to pressure Tehran into reopening the Strait of Hormuz, four sources with knowledge of the matter told US outlet Axios.

Kharg Island, located in the Persian Gulf, lies around 16 miles off the Iranian coast and roughly 300 miles north-west of the Strait of Hormuz. The island processes about 90 per cent of Iran's crude oil exports and has long been vital in connecting the country's oil reserves with the global market.

"He [Trump] wants Hormuz open. If he has to take Kharg Island to make it happen, that's going to happen," a senior administration official told Axios. "If he decides to have a coastal invasion, that's going to happen. But that decision hasn't been made.

Officials have warned that occupying or blockading the island would put US troops at serious risk. Such an operation would therefore only be launched once US forces have degraded Iran’s military capacity around the strait, Axios reports.

"We need about a month to weaken the Iranians more with strikes, take the island and then get them by the balls and use it for negotiations," a source told the outlet.

But others warned that such a high-risk move could backfire. Rear Admiral (Ret.) Mark Montgomery told Axios: "If we seize Kharg Island, they're going to turn off the spigot on the other end. It's not like we control their oil production."

Kharg Island has massive storage tanks and pipelines capable of handling millions of barrels of crude oil daily. Large oil tankers regularly dock there to transport oil extracted from fields in southwestern Iran. The island was targeted during the eight-year Iran-Iraq War, due to its strategic economic importance.

It comes as three more warships and around 2,500 more marines are making their way to the Middle East, a US official confirmed to The Associated Press. Three sources told Axios that an occupation of the island by ground troops is being considered, as well as the options to impose a naval blockade and prevent tankers from reaching the island.

One source told Axios that the Marines arriving in days could carry out other operations, including evacuating embassy staff in the region if needed. The US military says it already has about 50,000 troops stationed in the region. The Pentagon’s request for another $200 billion to fund the war would need congressional approval as the US national debt hits a record $39 trillion.