Iran has threatened retaliation after accusing Ukraine of a missile strike on a tanker in the Caspian Sea.
Foreign minister Abbas Araghchi said on Sunday the reported strike on a commercial vessel “cannot go unanswered” in call with the EU’s top diplomat Kaja Kallas and his Russian counterpart Sergei Lavrov.
Kyiv’s forces struck a Russian warship and vessels used for transporting Iran-linked military cargo in the Caspian Sea, Ukrainian president Volodymyr Zelensky said on Saturday.
Tehran said that Kyiv had attacked an Iranian commercial vessel and killed a sailor, describing the incident of an act of aggression and accusing Ukraine of trying to expand the Russia-Ukraine war.
The latest flare up came despite the US pausing attacks on Iran to resume negotiations through diplomatic channels, according to the US ambassador to the UN.
Mike Waltz told Fox News on Sunday that Trump was "giving talks some space; he's giving it a little bit of room".
Donald Trump's advisers had told him before the climbdown that they were running out of targets and expressed worries about depleting the US arsenal.
European gas reserves at ‘historically low level’ - but fears of 2022 price shock played down
The Independent’s Karl Matchett writes:
Europe faces a gas shortage this winter due to lower global production and reserves being run down due to the Iran war, an analyst has warned.
Liquified natural has (LNG) is a key part of the overall energy mix for the UK and Europe. On the continent, natural gas as a whole accounts for around a fifth (21 per cent) of total energy consumption, according to Eurostat’s research, with LNG representing around 40 per cent of that gas usage in 2024.
An estimated 89 per cent of Europe’s overall gas supply in 2025 came from outside the EU - including the UK - and analysts at Wood Mackenzie have cautioned that the continent “is approaching energy crisis territory.”
Research from the firm shows European inventory is “only just above 50 per cent, an historically low level” for this period of the year.
“Low European inventories, strong Asian demand and limited new LNG supply growth almost guarantee elevated prices through this winter and into 2027,” said Massimo Di Odoardo, Wood Mackenzie’s vice president of gas research.
Watch: Trump keeping 'all options on the table' on Iran, US ambassador says
Houthis looking to replicate Iran's Hormuz strategy in Red Sea, says foreign minister
Yemeni Houthis are looking to copy Iran's Hormuz strategy in the Red Sea by disrupting shipping in the Bab el-Mandeb.
Yemen's top diplomat said that the movement has been emboldened by an insufficient international response.
Foreign Minister-designate Afrah Al-Zouba told journalists on Monday: “The Houthis want to copy the Iranian model and this will shut down two main straits, the gateways into the Gulf and Red Sea.”
The Red Sea has become a new front in the Iran war, with the Houthis taking an escalatory approach against Saudi Arabia by firing missiles and drones at the kingdom and declaring a blockade on Saudi shipping.
Pentagon change appears to make it harder to tally military deaths and injuries
The Independent’s Isabel Keane reports:
The Pentagon has made changes to the way it reports military casualties, potentially making it more difficult to track the number of deaths and injuries overseas.
Casualties reported overseas since July 7 — when the U.S. cease-fire with Iran collapsed and the conflict intensified — are no longer listed on the Pentagon website under “Operation Epic Fury,” where earlier casualties were listed.
As of Sunday, the Defense Department appears to be tracking casualties in the “Defense Casualty Analysis System,” under a new category labeled “overseas operations casualties.”
This means that to track all U.S. casualties since the Iran war began February 28, the numbers from the two separate webpages must be added up.
With the change, four fatalities that had been scrubbed from the website last week were added back but on a new webpage. Those deaths include First Lieutenant Tyler James Feehan, Sergeant Angel S. Rampersad, Private Isabella Gonzales and Sergeant Michael Emmanuel Swinton.
Trump says there is 'good chance' of deal with Iran
There is a chance with a deal between the US and Iran following “good talks”, Donald Trump said on Monday, warning that strikes would resume if the negotiations failed to deliver.
It comes as Saudi Arabia, Jordan and Iraq reported drone attacks today, despite the US abruptly suspending a two-week campaign of air strikes on Iran on Saturday
“We're having good talks,” he 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.”
At a campaign rally in Michigan later on Monday, Trump said 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.”
Iran's Foreign Ministry spokesman Esmail Baghaei said on Monday that messages were still being passed between the sides through mediators and Iran had not forsaken diplomacy, but reports that it requested negotiations were “fabricated.”
“This is not in our DNA,” he said.
Most Americans think Trump has failed to explain his goals in Iran
Just one in three Americans support the war on Iran, the lowest reading in a Reuters/Ipsos poll since the five-month-old conflict's early days, with most respondents saying that Donald Trump has failed to explain his goals.
The poll, conducted Friday through Sunday, also showed the Republican president's approval rating ticking higher to 37 per cent, up three points from last month when his rating tied the lowest of his presidency.
Trump has offered shifting objectives for the conflict such as aiding Iranians to topple their leaders, taking out Iran's ballistic-missile capabilities and preventing it from obtaining a nuclear weapon.
The poll found that 69 per cent of Americans — including four in 10 Republicans - think Trump has not “clearly explained the goals of U.S. military involvement in Iran.”
White House spokeswoman Olivia Wales said Trump will not make decisions based on “fluid opinion polls” and reiterated the president's resolve to prevent Iran from ever acquiring a nuclear weapon.
“What matters most to the American people is having a commander in chief who takes bold action to keep them safe,” Wales said.
Stocks jump as US-Iran pause sees oil price fall
The FTSE 100 closed higher in London on Monday as investors welcomed a temporary pause in hostilities between the US and Iran, which helped drive the oil price sharply lower.
The FTSE 100 index closed up 45.52 points, 0.4%, at 10,781.75. The FTSE 250 ended up 96.61 points, 0.4%, at 23,898.10, while the AIM All-Share closed down 1.29 points, 0.2%, at 771.69.
In the Middle East, the US held fire at the weekend after 13 days of attacks on sites in Iran, and Donald Trump’s UN envoy said the US president was “giving talks some space”.
Tehran said in turn it would stop its retaliatory attacks on regional neighbours, handing Gulf shipping and the oil industry a respite.
David Morrison at Trade Nation said it is “unclear” if this is a precursor to a resumption of peace talks, or a tactical move militarily.
Saudi Arabia says it destroyed drones launched by Iran-backed groups in Iraq
Saudi Arabia's air defences intercepted and destroyed drones launched from Iraq that attempted to target oil facilities in the kingdom's Eastern Province and Riyadh, the Saudi Defence Ministry said on Monday.
The ministry called on the Iraqi government to take all necessary measures to prevent Iraqi territory from being used as a launchpad for attacks against Saudi Arabia.
Iraq's prime minister ordered an investigation into the incident, his media office said Monday evening, adding Iraq will not allow its territory to be used to launch attacks against neighbouring countries.
The ministry said the drones were launched by Iran-backed armed groups in Iraq.
Saudi Arabia's Foreign Ministry condemned the attack against the kingdom, reaffirming its right to respond to the sources of "the aggression" and deter those responsible.
Oil prices fall back sharply on renewed Iran war ceasefire hopes
Oil prices have retreated below 90 US dollars a barrel as a pause in fighting between the US and Iran boosted hopes of rekindling a peace deal and reopening the vital Strait of Hormuz.
The cost of benchmark Brent crude dropped 8% to 87.55 US dollars a barrel at one stage in ongoing heightened volatility in oil and gas markets caused by the Middle East conflict.
Oil had touched 100 dollars last week on renewed hostilities between the US and Iran.
But prices have eased back on renewed hopes of a resolution, with a pause in attacks for three days in a row and mediators in neighbouring countries looking to get the US and Iran back to the negotiating table.
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Houthis claim attack on Saudi east-west oil transport
Yemen's Iran-aligned Houthis said on Monday they targeted a number of sensitive crude oil supply and transport sites linking eastern Saudi Arabia to the critical Red Sea oil export hub of Yanbu.
Saudi state oil giant Aramco did not immediately respond to a request for comment.
Houthi military spokesperson Yahya Saree said the operation was in response to what he described as Saudi drone incursions into Yemeni airspace.