US-Iran war appears to be stalling as Trump offers space for talks to end Strait of Hormuz standoff

World stocks were higher on Monday and oil prices fell nearly 7% as the US and Iran avoided war while discussing the possibility of resuming talks on a temporary ceasefire deal.

The Pentagon has not spoken openly about the suspension of attacks on Iranian coastal areas and infrastructure after two weeks of fighting, but US Ambassador to the United Nations Mike Waltz said on Sunday’s “Face the Nation with Margaret Brennan” that it is intended to “give diplomacy some space.”

Markets reacted favorably. US futures rose early on Monday and the price of a barrel of Brent crude, the international standard, fell 6.8% to $85.49. Benchmark US crude fell 7% to $83.06 per barrel.

“Oil’s sharp pullback at Monday’s open did more than knock a few dollars off the barrel. It loosened the political knot that had been tightening around equities, currencies, bonds and central banks for most of July,” SPI Asset Management’s Stephen Innes said in a statement.

In early European trading, Germany’s DAX gained 1.6% to 25,497.42 and the CAC 40 in Paris rose 0.8% to 8,436.94. Britain’s FTSE 100 rose 0.5% to 10,784.00.

Futures for the S&P 500 and the Dow Jones Industrial Average were up 1%.

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Iran’s Foreign Ministry denied on Monday any direct current talks with the US, but acknowledged ongoing talks with Oman aimed at finding a plan to reopen the Strait of Hormuz to shipping traffic.

“The discussions we had in the last few days were only for Oman,” ministry spokesman Esmael Baqaei told reporters in Tehran on Monday.

He said that since the two countries are bordering on the problem, Iran and Oman are “trying to establish ways in relation to sea travel.”

“Currently we do not have discussions with the United States. The discussions we have – and which may sometimes be under different definitions – are the same discussions we are conducting with Oman, which are focused on creating the necessary plans regarding the Strait of Hormuz.”

An Iranian official told CBS News’ Margaret Brennan on Sunday that talks between Iranian and Omani officials over the weekend were constructive, with talks aimed at reopening the border crossing.

US Ambassador to the United Nations Mike Waltz told “Look at the Nation with Margaret Brennan” the suspension was intended to “give diplomacy some space.”

Waltz said the US will assess how things are going in the coming days, and stressed that US military equipment is “entering the region,” adding: “The government should believe the president when he says they are locked and loaded.”

Johannesburg – The Iranian Revolutionary Guard has stopped six ships trying to pass through the Strait of Hormuz on routes not approved by the Iranian authorities, state television reported on Monday.

“Last night, six ships that tried to pass through the route outside of it were stopped by the IRGC Navy with warning guns and turned back,” reported a state television correspondent in the Gulf.

Earlier, state TV said a person was involved in the “incident,” without elaborating.

On Saturday, security forces said they stopped four vessels trying to pass through the southern part of the road after the shooting.

Iran has successfully blockaded the Strait of Hormuz since the Middle East war began in late February.

More than 400 U.S. service members have been flown out of the Middle East for various types of medical treatment since Operation Epic Fury began, a U.S. official told CBS News. However, most of the cases were not related to fighting, the official said.

Operation Epic Fury, a joint military campaign by the US and Israel against Iran, began on Feb. 28.

The spokesman of the Ministry of Foreign Affairs of Iran, Esmail Baqaei, said on Sunday that the situation in the Strait of Hormuz has not changed, as Iranian and Omani officials continue negotiations to control the safe movement of ships in the waters that pass between the two countries.

Baghaei said the talks have progressed. They came after Tehran insisted that its interim deal with the US allows it to control shipping in the crisis for now, and opposed US efforts to support a strait that passes near Oman instead. The strait was considered an international waterway before the war.

The US Navy said on Saturday that its newly-imposed naval blockade against Iran was continuing, with a dozen commercial vessels diverted, two disabled and two boarded. The US military “remains alert, focused, lethal and ready,” it added.

Israeli Prime Minister Benjamin Netanyahu said on Sunday on Fox News’ “Sunday Morning Futures” that he supports the pressure of Mr. Trump that Iran has ended its nuclear program. During his upcoming visit to Washington, Netanyahu suggested that he would not share new ideas with Mr. Trump and instead listen to “what he has in mind, because I think in many ways, it’s his decision.”

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Talks between Iranian officials and their Omani counterparts over the past two days have been constructive, another Iranian official told CBS News on Sunday. Negotiations to reopen the Strait of Hormuz are also progressing well, the official said.

This diplomacy aims to reopen the waterways around the Strait. It is directly linked to the suspension of US strikes on Iran for two consecutive nights, despite President Trump and Defense Secretary Pete Hegseth saying the Strait is already open, and the US controls it.

The US Central Command temporarily suspended the bombings on Friday and Saturday after 13 straight days of strikes. Tehran also temporarily suspended bombings on Sunday.

US Ambassador to the United Nations Mike Waltz told “Look at the Nation with Margaret Brennan” on Sunday that the suspension was intended to “provide room for dialogue.”

“It gives diplomacy a little time. The president tried diplomacy last year, he tried this year. He is the president of peace. He gives diplomacy a chance,” said Waltz, who added that the US will assess how things go in the coming days. “Make no mistake, supplies, more military supplies, are coming into the region. The government should believe the president when he says they are locked and loaded.”

In a July 10 letter, Trump gave Congress formal notice that war against Iran had resumed on July 7.