Oil prices dropped about 11 percent on Monday after US President Donald Trump said he would postpone any military strikes against Iranian power plants for five days and cited constructive talks to resolve hostilities.

Early on Monday, Trump wrote on his Truth Social platform that the US and Iran had held "very good and productive" conversations about a "complete and total resolution of hostilities in the Middle East", and as a result he was postponing for five days a plan to hit Iran's energy grid.

But Tehran denied any direct contact.

Mohammad Bagher Ghalibaf, the speaker of Iran's Parliament, said on social media that no negotiations had been held with the United States.

"No negotiations have been held with the US, and fake news is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped," he wrote on X on Monday.

Trump later told reporters his special envoy Steve Witkoff and son-in-law Jared Kushner, who had been negotiating with Iran before the war, had held discussions with a top Iranian official into the evening on Sunday and would continue on Monday, but he did not identify the Iranian official.

"We have had very, very strong talks. We'll see where they lead. We have major points of agreement, I would say, almost all points of agreement," he told reporters before departing Florida for Memphis, Tennessee.

Brent futures on Monday fell $12.25 to settle at $99.94 a barrel, while West Texas Intermediate lost $10.10 to settle at $88.13.

Extreme price changes in recent weeks — Brent closed at its highest since July 2022 on Friday — boosted both crude benchmarks' 30-day futures volatility to the highest since April 2022, Reuters reported.

Analysts have estimated a loss of 7 million to 10 million barrels per day of Middle East oil production.

US Federal Reserve Governor Stephen Miran said on Monday that it is too soon to say what the energy price shock from the Iran war will do to inflation and that he still thinks rate cuts are warranted to support the job market.

The International Energy Agency has warned that disruptions to shipping through the Strait of Hormuz pose significant risks to global energy markets.

As of Monday, the head of the IEA said at least 40 energy assets across nine countries in the Middle East have been "severely or very severely" damaged since the war began, raising concerns about prolonged disruptions to global energy supply.

Iran's Defence Council, a high-level security body, has said in a statement that the "only way for non-hostile countries" to pass through Strait of Hormuz is in "coordination with Iran", BBC reported.

Troops option weighed

The Pentagon is weighing a possible deployment of airborne troops to support military operations in Iran, The New York Times reported on Monday, citing senior defense officials.

The combat forces would come from the US Army's 82nd Airborne Division's "Immediate Response Force", a brigade of about 3,000 soldiers capable of deploying anywhere in the world within 18 hours, said the report, noting that so far nothing had been ordered by the Pentagon or US Central Command.

These forces could be used to seize Kharg Island, Iran's main oil export hub, according to the report.

Another option being considered, should Trump authorize US troops to seize the island, is an attack by about 2,500 troops from the 31st Marine Expeditionary Unit, which is on its way to the Middle East, said the report, citing officials speaking on condition of anonymity.

The US Central Command said on Monday that the US military has conducted more than 9,000 strikes in Iran, including damaging or sinking over 140 Iranian naval vessels, since the United States and Israel launched joint military strikes on Iran on Feb 28, disrupting global shipping, sending oil prices soaring and shaking the global economy.

Reuters and Xinhua contributed to this story.