US President Donald Trump has proposed a $10 billion fund to rebuild war-damaged energy infrastructure and develop oil and gas export routes that bypass the Strait of Hormuz, with $5 billion in US funding and a matching $5 billion contribution from Gulf and other regional partners, a report said.

The proposed Partnership for Allied Trust and Construction (PACT) would bring together the US, Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iraq and Jordan, according to the Wall Street Journal, which cited US and Middle Eastern officials and documents. Discussions are still under way and the terms could change.

The plan comes as the seven-month war with Iran has exposed the vulnerability of the Gulf's energy infrastructure and the risks posed by the region's dependence on the Strait of Hormuz, through which a major share of global oil and gas shipments normally passes.

Washington's proposed $5 billion contribution would be matched by the eight regional partners, creating the initial $10 billion investment fund. The initiative would be managed by the US Development Finance Corporation and would focus not only on repairing pipelines, refineries and other energy facilities damaged during the war with Iran, but also on developing alternative export routes to reduce dependence on the Strait of Hormuz.

The proposal comes as oil markets show signs of easing after months of extreme supply disruption, with Brent crude falling to around $98.11 a barrel and below the key $100 threshold as Saudi Arabia moves to restore its East-West pipeline and diplomatic efforts between Washington and Tehran gather pace.

Saudi Arabia has resumed operations at reduced rates, with full capacity expected to take several weeks to restore. The pipeline has the capacity to move about 7 million barrels per day, although the initial restart is expected to be below that level.