Trump says the US and Iran are in diplomatic contacts to end the conflict and warns that if negotiations fail, military action will resume

The Zhitong Finance App learned that US President Trump said on Monday that the US and Iran are in diplomatic contacts to end the Middle East conflict, but at the same time warned that if negotiations fail to reach an agreement, the two sides will return to military confrontation.

Trump told reporters on “Air Force One” on the same day that the reason Iran is willing to engage is because the US has previously carried out a strong attack on it. He said that “it is very likely” that both sides will make progress, but if diplomatic efforts fail, the US will resume its previous actions.

Trump's latest statement means that the risk of further escalation of the US-Iran conflict in the short term has been mitigated. Previously, Trump had repeatedly threatened to launch a “large-scale” military attack on Iran. However, during the conflict over the past few weeks, Trump also stated many times that negotiations were progressing and that an agreement was about to be reached, but the war continued to escalate thereafter. Currently, there is still great uncertainty about whether substantial negotiations have begun between the US and Iran.

Earlier, the US had suspended new military attacks on Iran for the third day in a row, while Iran also suspended attacks on Kuwait and other Gulf countries. After the temporary cease-fire agreement signed between the two sides last month broke down due to the Strait of Hormuz issue, clashes broke out again.

Iranian Foreign Ministry spokesman Baghaei said on Monday that the mediators may still be conveying information from the US, but no formal negotiations have begun between the two countries. Meanwhile, people familiar with the matter revealed that Oman and Iran are currently discussing the resumption of shipping in the Strait of Hormuz, hoping to push for the reopening of this major global energy transportation route.

However, the situation in the Middle East remains tense.

The Houthis in Yemen claimed on Monday that they had launched a drone attack on Saudi Arabia's oil facilities, but did not disclose the exact time. The Saudi side said it successfully intercepted several drones flying in the direction of Iraq on the same day, targeting oil facilities.

According to media reports, the US military is cautious about further escalating the conflict.

According to some sources, senior US military general Brad Cooper, who is responsible for Middle East affairs, proposed suspending air strikes against Iran, believing that the effectiveness of related military operations is close to the limit. At the same time, there are also reports that several military advisers have suggested that the White House avoid further escalation of the situation. One reason is that the US stocks of some high-end interceptor missiles continue to decline.

Trump, on the other hand, said that the US still has sufficient ammunition reserves, but admitted that it wants to have more advanced weapons, especially high-end interception systems such as the “Patriot” anti-aircraft missiles. He attributed part of the inventory pressure to continued military aid to Ukraine during the Biden administration.

The Iranian military said that due to the suspension of US military attacks, Iran has stopped retaliatory actions against US military bases and military garrisons in the Middle East. In the previous two weeks, Iran attacked US allies such as Kuwait, Bahrain, and Jordan almost every day.

International oil prices declined markedly on Monday due to market expectations for an easing of the situation. Light crude oil futures for September delivery fell $6.70, or 7.5%, to close at $82.61 a barrel on the New York Mercantile Exchange; London Brent crude oil futures for September delivery fell $8.42, or 8.7%, to close at $88.36 a barrel; US Treasury yields also declined at the same time.

Additionally, Israeli Prime Minister Binyamin Netanyahu is expected to visit Washington on Tuesday to hold talks with Trump. Netanyahu said he would urge the US to continue to pay close attention to Iran's nuclear program.

On the other hand, Iran said that there is currently no change in the Strait of Hormuz traffic policy, which means that the relevant merchant ships still need permission from Iran before they can sail. Currently, the shipping activity of this important waterway, which is responsible for about one-fifth of the world's crude oil and liquefied natural gas transportation, is still low, and the US blockade measures against Iranian ports are still ongoing.

Meanwhile, Iranian and Omani officials held a new round of talks over the weekend on resuming shipping in the Strait of Hormuz. Iran said that discussions between the two sides were constructive and some progress was achieved, but did not disclose specific details, and indicated that negotiations would continue.