U.S. President Donald Trump said negotiations with Iran will begin Monday after he held off on new strikes against the Middle Eastern country, once again raising hopes for a diplomatic resolution to the conflict that has upended energy supplies.

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“Now what we’re doing is we’re talking to them in the form of a negotiation. It begins tomorrow afternoon,” Trump told reporters Sunday aboard Air Force One, without disclosing the venue or participants.

He said he had called off the strikes at the request of Saudi Arabia, the United Arab Emirates, Qatar and Iran, and described a deal covering the Hormuz Strait and Iran’s denuclearization as “imminent.”

Trump said on Saturday the planned operation would have been the biggest since World War II, while adding that the U.S. was ready to attack Iran.

The Strait of Hormuz — which handled around one-fifth of global oil supply before the war — has seen traffic drop to a trickle with sporadic increase in ship transits on positive headlines.

Oil retreated on signs of a diplomatic breakthrough. Brent crude fell 4.6% to around $83.96 a barrel on Monday, while U.S. crude dropped about 4.7% to $80.6.

Shipping risks persist even as diplomacy appears to be advancing. The United Kingdom Maritime Trade Operations said it received a report of an incident 20 nautical miles northeast of Khasab, Oman — at the mouth of the Hormuz strait — with a tanker’s master reporting an explosion in close proximity to the vessel at about 20:37 UTC Sunday (4:37 pm ET). The vessel and crew were safe and authorities are investigating, UKMTO said, advising ships to transit with caution.

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The latest proposal announced by Trump over the weekend calls for the U.S. and Iran to return to negotiations and continue ironing out some of the thorny issues that had derailed diplomatic efforts, according to the Associated Press, citing a regional official involved in the mediation efforts.

The official said the proposal also includes a reopening of the Hormuz Strait and halting attacks across the region, including by Iranian-backed militias in Iraq on the Arab Gulf countries and Jordan.

The U.S., for its part, will end its naval blockade on Iran and allow Tehran to export its oil, the official said, adding that no deal has been reached, although the mediation efforts remained underway.

Trump’s weekend reversal has lowered the temperature after days of escalating attacks across the Gulf. Kuwait said on Saturday that Iranian forces launched a wave of drones within its airspace, with its military destroying multiple aircraft after Iran targeted critical infrastructure in the country’s north.

A parallel track with Muscat is also advancing. Iranian diplomats said Tehran was close to reaching a new arrangement with Oman to manage shipping through the Strait of Hormuz, a deal critical to preventing the war from escalating further, according to the Financial Times.

Iranian officials said negotiations over future management of the Hormuz strait with Oman, which sits on the opposite shore of the waterway, are in their final stages. The agreed shipping route would be different from those used before, according to Iran’s foreign ministry spokesperson Esmaeil Baghaei, adding that the new route was separate from the issue of the strait’s reopening or continued closure.

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