A recent Iranian diplomatic effort to defuse tensions with Arab neighbours in the Persian Gulf has failed amid renewed calls from Saudi Arabia, Israel and hardline US senators for a return to tough sanctions aimed at isolating the Islamic republic.

The renewed sense of confrontation comes a year after the formal relaxation of US-led international energy sanctions against Iran.

Tehran has since January 2016 restored most of its lost crude production capacity and announced plans for billions of dollars’ worth of oil and gas project awards.

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