US-Iran peace talks to resume Monday after Trump halts planned strikes; oil falls

US President Donald Trump said the United States will resume negotiations with Iran on Monday after he decided to halt a planned large-scale military attack.

Speaking to reporters aboard Air Force One on Sunday after spending the weekend at his golf club in Bedminster, New Jersey, Trump said negotiations would begin "tomorrow afternoon".

"I'd rather make a deal. I'm not looking to kill people because people die, a lot of people die, and we don't want that," Trump said when asked whether Iran faced a deadline to reach an agreement.

He said the US had been prepared to launch a "massive attack" but paused the operation after requests from allies, including Saudi Arabia, the United Arab Emirates and Qatar, as well as from Iran.

"We're all set to go, but when the allies asked to call it off, they got us sort of saying, 'Well, let's see.' And the reason they ask is they think there's a deal," Trump said.

He added that discussions were focused on reopening the Strait of Hormuz and reaching what he described as the "denuclearisation of Iran".

Iran, however, denied seeking a halt to any planned US military action.

The semi-official Fars news agency dismissed Trump's claim, saying: "Trump the fool has run out of steam!"

Diplomatic activity intensified over the weekend as Saudi Crown Prince Mohammed bin Salman held a telephone conversation with Trump, urging de-escalation, according to Saudi state media.

Iranian Foreign Minister Abbas Araghchi also held separate conversations with Saudi Foreign Minister Prince Faisal bin Farhan Al Saud and Pakistan Army Chief Asim Munir on Sunday, Iranian state media reported.

The calls came a day after Araghchi warned his Saudi counterpart that any aggression by the United States or Israel would receive a "firm and proportionate response".

He had also spoken separately with Turkish Foreign Minister Hakan Fidan and Munir on Saturday, reiterating that Iran would respond to any "adventurous action" by Washington.

Oil prices fell sharply after Trump's announcement raised hopes of easing tensions and renewed diplomacy.

Brent crude dropped about 5.6% to around USD 83 a barrel, while US crude declined about 5.5% to roughly USD 80 a barrel.

Meanwhile, OPEC+ agreed to raise oil production by another 188,000 barrels a day in September, marking the sixth consecutive monthly output increase as the producer group continues unwinding voluntary production cuts introduced in 2023.

The alliance of major oil-producing countries said the increase would support market stability while allowing participating members to accelerate compensation for previous overproduction. It added that member countries would continue holding monthly meetings, with the next scheduled for September 6.