Oil prices tumbled on Monday as a pause in tit-for-tat strikes between the United States and Iran boosted hopes for a return to their ceasefire and negotiations on reopening the Strait of Hormuz.

The United States held fire at the weekend after 13 days of attacks on sites in the Islamic republic, 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.

The two resumed hostilities this month, breaking a fragile truce, after Iran attacked ships passing through Omani waters in the Strait of Hormuz, sparking a pattern of escalation.