Trump says 'friendly negotiations' on with Iran, but warns that strikes could resume; crude oil prices fall sharply

US President Donald Trump on Monday said Washington was engaged in "good talks" with Iran and expressed hope that negotiations could help end the ongoing conflict, while warning that the United States is prepared to resume military strikes if diplomacy fails.

"We're having good talks," Trump said. "I think there's a good chance that something could happen, and if it does, good, if it doesn't, we go back to doing what we were doing two days ago."

Speaking later at a campaign rally in Michigan, Trump struck a tougher tone, saying of Iran: "You can't bribe them. You've got to beat them, and we'll beat the hell out of them. But we'll see how it turns out. Right now, there are very friendly negotiations going on."

The remarks came after Washington suspended its two-week air strikes against Iran on Saturday, marking another shift in Trump's strategy amid the five-month-old conflict. However, regional tensions remained high, with Saudi Arabia, Jordan and Iraq reporting drone attacks on Monday.

Iran maintained that diplomatic channels remained open but denied reports suggesting it had sought negotiations with Washington. Foreign Ministry spokesman Esmail Baghaei said messages were still being exchanged through mediators, adding that reports claiming Iran requested talks were "fabricated." "This is not in our DNA," he said.

A senior Iranian official also told Reuters that Tehran would halt its attacks as long as Trump's ceasefire remained in effect. 

Later in the day, Iran's central military command accused the US of threatening commercial vessels and oil tankers in its territorial waters and "attempting to implement an illegal maritime blockade", calling it "an escalation of the conflict in the region."

Saudi Arabia said it intercepted drones targeting petroleum facilities, including sites in Riyadh, and blamed Iran-backed armed groups operating from Iraq. Separately, Yemen's Iran-backed Houthi rebels claimed responsibility for an attack on the East-West Pipeline supplying Saudi Arabia's Red Sea port of Yanbu.

Meanwhile, oil prices fell sharply after Trump's comments fuelled hopes of a diplomatic breakthrough. US crude dropped 8.21% to $81.98 per barrel, while Brent crude fell 9.31% to $87.77 per barrel, reflecting expectations that easing tensions could reduce risks to global energy supplies.