Updates prices and adds Trump context in paragraph 3

By Stephanie Kelly

LONDON, April 29 (Reuters) - Oil prices rose 3% on Wednesday, with the Brent contract hitting a one-month high, after a media report said that the U.S. will extend its blockade of Iranian ports, likely prolonging Middle East supply disruptions.

U.S. President Donald Trump has instructed aides to prepare for an extended blockade of Iran, the Wall Street Journal reported late on Tuesday, citing U.S. officials.

Trump will opt to continue to squeeze Iran's economy and oil exports by preventing shipping to and from its ports, the report said. On Wednesday, Trump urged Iran to "get smart soon" and sign a deal to end the conflict.

Brent crude futures for June LCOc1 rose $3.50, or 3.2%, to $114.76 a barrel by 1225 GMT, climbing for an eighth day to the highest level since March 31. The June contract expires on Thursday and the more active July contract was up 3.2% at $107.73.

U.S. West Texas Intermediate (WTI) futures for June CLc1 rose $3.51, or 3.5%, to $103.44 a barrel, the highest since April 13. The contract has risen on seven of the past eight days.

"If Trump is prepared to extend the blockade, supply disruptions would worsen further and continue to push oil prices higher," said Haitong Futures analyst Yang An.

Abu Dhabi National Oil Company has notified some customers that they could load two crude grades outside of the Gulf next month because the Strait of Hormuz remains closed, according to two people with knowledge of the matter and a notice seen by Reuters.

Investors were also assessing ramifications of the United Arab Emirates' surprise decision to quit OPEC, though analysts did not expect any major near-term impact on the market.

"The United Arab Emirates’ exit from OPEC+ formalises the organisation's weaker cohesion, but the near‑term impact is limited," said an ANZ Research note.

"The move reflects long‑standing quota tensions, but prices are still being driven more by geopolitics, inventories and logistics than by institutional changes."

There must be a resolution in the Gulf that allows for uninhibited energy flows through the Strait of Hormuz before the UAE's output increase can come into effect, ING analysts wrote in a note on Wednesday.

In the medium to longer term, the UAE's decision means more supply for the market, which suggests that the Brent forward curve should move into deeper backwardation, the ING analysts said. Backwardation is a market structure in which futures trade at a lower price than spot contracts.

The market was also awaiting U.S. Energy Information Administration data on stockpiles. The American Petroleum Institute reported on Tuesday that domestic crude oil inventories fell for a second week. API/S EIA/S