The binary framing of Washington's options, a negotiated pause or a major escalation alongside Israel, leaves oil markets facing two sharply different near term paths rather than a gradual drift in either direction. A ceasefire that reopens both Hormuz shipping lanes would remove much of the war premium built into crude prices in recent weeks, while a coordinated US Israeli campaign would likely push prices toward fresh highs given the risk to physical flows through the strait. The buildup of US fighter jets and refuelling aircraft in the region, alongside Israeli forces on high alert, signals traders should not assume de-escalation is the more likely outcome simply because talks are underway. Until Trump signals a clear direction, expect prices to stay highly sensitive to headline flow from both the diplomatic and military tracks.---Trump is approaching a fork in the road between a mediated ceasefire that would reopen the Strait of Hormuz and a coordinated escalation with Israel, with both outcomes still very much live heading into the coming days.Earlier:Oil holds near one month highs as renewed US Iran conflict enters 10th nightSummary:US and Israeli officials reportedly see only two viable paths forward, a 10 day ceasefire or a major joint military campaign against IranQatar, Egypt, Pakistan and other regional mediators have presented a ceasefire proposal to the US and IranThe Trump administration is exploring the proposal while urging Israel to avoid steps that could close the diplomatic windowThe US military has sent dozens of fighter jets and refuelling aircraft to the region in preparation for a possible escalationTen consecutive nights of US strikes have not broken Iran's grip on the Strait of Hormuz, with at least three US service members killed in the renewed fightingOil briefly broke above $90 a barrel over the weekend as Iran widened its strikes on commercial shipping and Gulf infrastructureThe proposed ceasefire would reopen both Hormuz shipping lanes and allow 10 days of negotiations on a longer term arrangement, potentially including service fees modelled on the Strait of MalaccaNeither Trump nor Iran has accepted the proposal, and the Houthis have separately declared a maritime blockade on Saudi portsPresident Trump is nearing a decisive fork in the Iran war, with US and Israeli officials seeing only two viable paths forward, according to Axios. One option is a new 10 day ceasefire aimed at reopening the Strait of Hormuz. The other is a massive joint military campaign with Israel intended to force Tehran's capitulation. Officials believe the coming days will determine which path prevails, with little room left for the grinding, open ended conflict currently paralysing the Gulf.Qatar, Egypt, Pakistan and other regional mediators have presented Washington and Tehran with a proposal for a 10 day ceasefire. The Trump administration is exploring the proposal and has urged Israel to avoid steps that could close the diplomatic window, though Washington is simultaneously preparing for the talks to fail. The US military has sent dozens of fighter jets and refuelling aircraft to the region in recent days, assembling the forces needed for a major escalation, while Israeli sources say the IDF is on high alert and preparing for a possible expansion of the war into a full scale, coordinated campaign within days.Ten straight nights of US bombing have failed to break Iran's grip on the strait, dragging Trump deeper into a conflict he has repeatedly declared won. At least three US service members have been killed in the renewed fighting, and Trump said Monday he had ordered the Pentagon to make Iran pay for every American death. Oil briefly broke above $90 a barrel over the weekend as Iran widened its strikes on commercial ships and Gulf infrastructure, with rising gas prices compounding domestic backlash to an increasingly unpopular war.The proposed ceasefire would halt the fighting, reopen both Hormuz shipping lanes and give both sides room to salvage their collapsing memorandum of understanding, with a 10 day window to negotiate a longer term arrangement governing passage through the strait. One option under discussion would allow Iran to collect service fees for maritime security and environmental protection, modelled on the approach used in the Strait of Malacca, while another would direct such fees into a joint fund involving the International Maritime Organization.Neither Trump nor Iran has accepted the proposal, and both sides appear determined to improve their leverage through further strikes first. Iran's Foreign Ministry spokesperson said mediators' proposals had been received, though he declined to discuss details and said Iran's armed forces would continue to "respond with strength" against what Tehran views as US aggression. Meanwhile, Iran backed Houthis in Yemen have declared a maritime blockade on Saudi ports, opening another front against Gulf energy infrastructure, and Israeli Prime Minister Benjamin Netanyahu has warned Israel will answer any Iranian attack with massive strikes, raising the risk of a wider war stretching from the Gulf to the Red Sea and Israel itself. This article was written by Eamonn Sheridan at investinglive.com.