Oil prices fell sharply on Sunday evening and into Monday after U.S. President Donald Trump said he had called off a major planned military operation against Iran and confirmed that negotiations with Tehran would begin Monday afternoon. The talks are intended to address the reopening of the Strait of Hormuz, with further discussions on denuclearization expected to follow.

Brent crude slid from a previous close near $91 to an intraday low of $82.83, a drop of about 9%, before recovering to trade around $84.06, still down more than 7% on the day. It briefly reached as low as $81.55. U.S. crude prices fell more than 6% to below $79 a barrel. The decline reversed part of a rally that had lifted prices more than 20% in the preceding month, though levels remained roughly 20% above those seen before the latest escalation in Middle East tensions.

Trump Cites Regional Requests to Pause Strikes

Trump told reporters that Saudi Arabia, the United Arab Emirates, Qatar and Iran itself had asked him to hold off on the attack. He linked the decision to progress on a deal for the Strait of Hormuz.

Saudi state media reported that Crown Prince Mohammed bin Salman had urged de-escalation in a weekend phone call with the U.S. president. Iran’s Foreign Minister Abbas Araghchi stated that negotiations between Iran and Oman over the strait were in their final stages. Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said the discussions sought a mutual mechanism for managing the waterway.

When asked about a deadline for the talks, Trump indicated flexibility while stressing readiness for action if needed.

Iran Disputes Account of Request to Halt Strikes

Iranian state media offered a different version of events. The semi-official Fars news agency denied that Tehran had asked the United States to pause military action and dismissed Trump’s account.

Tehran gave no public indication of a change in its position on the strait. The exchange fits a recent pattern in which Trump has attributed delays in military action to regional pressure while maintaining that U.S. forces remain prepared to act.

Any nuclear agreement would build on a memorandum of understanding signed by both sides in June that provided a 60-day window for negotiations. That period is now approaching its end.

Market Reaction and Broader Context

U.S. stock futures rose on the news, with S&P 500 futures advancing more than 0.5%. The sharp move in oil prices came after weeks of volatility driven by threats of strikes, shipping disruptions and supply concerns linked to the conflict. Prior signals from Trump had produced rapid swings in energy markets, including a nearly 10% jump earlier in the week tied to Hormuz-related tensions.

Despite the drop, oil prices stayed elevated relative to levels before the latest round of hostilities. Investors continued to watch developments closely, as any failure to reach agreement could quickly reverse the latest decline. The talks scheduled for Monday afternoon will test whether the pause in military plans can translate into a lasting arrangement for the strait and subsequent progress on nuclear issues.