Donald Trump announces 'very good' talks with Iran on ending war

President Donald Trump said Monday the United States and Iran had held "very good" talks towards ending the three-week Middle East war, putting threatened US attacks on Iran's power plants on hold in a stunning about-turn.

In a social media post that immediately sent oil prices tumbling, Trump said Washington and Tehran had held "productive conversations" over the last two days towards "a complete and total resolution" of hostilities in the Middle East.

In Iran, media outlets quoted the foreign ministry denying any such talks and suggesting Trump was angling to bring down energy prices sent soaring by the war -- with no mention of his claim on state television's latest news bulletin.

But Trump asserted he had told the Pentagon, on the basis of talks to date, to "postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period, subject to the success of the ongoing meetings."

He said the US-Iranian sides would keep talking "throughout the week."

The bombshell announcement came ahead of a Monday night ultimatum for the Islamic republic to reopen the Strait of Hormuz shipping lane -- or see Trump "obliterate" its power plants.

In response, Iran had threatened to deploy naval mines in the Gulf and target power plants across the region -- ramping up its rhetoric after warnings the world faced an energy crisis of historic proportions if the US-Israeli war with Iran drags on.

Tehran has retaliated against US-Israeli attacks by throttling traffic through Hormuz, conduit for a fifth of global crude, hitting energy sites and US embassies across the Gulf as well as targets in Israel.

Israel hit Tehran with fresh strikes on Monday, with the latest wave reported by the military minutes after Trump's announcement.

The head of the International Energy Agency Fatih Birol warned overnight that, in the event of a protracted war, daily oil losses put the world on track for a crisis worse than the combined impact of both 1970s oil shocks and Russia's invasion of Ukraine.

Oil prices have been driven above $100 a barrel by the conflict -- and they tumbled sharply after Trump's announcement, while and European stocks rebounded.

International benchmark Brent North Sea crude plunged more than 14 percent to $96.00 per barrel, while the main US oil contract West Texas Intermediate shed more than 14 percent to $84.37 per barrel.

Sign of the conflict's tentacular impact, the world's second economy China had said earlier Monday it was capping domestic fuel cost increases to mitigate the effect of surging oil prices.