With US-Iran nuclear negotiations entering a heated phase and Trump making harsh statements, is a turning point imminent for the oil market?
2026-02-25 10:09:17
On Tuesday (February 24), U.S. President Donald Trump, in an interview before his State of the Union address to Congress, stated that Iran is more eager than the United States to reach a "deal" on the nuclear issue. This statement comes on the eve of a new round of indirect negotiations between the U.S. and Iran, while the U.S. continues to increase its military presence in the Middle East, indicating that the window for negotiation is rapidly closing.
The turbulent situation in the Middle East is expected to inject a risk premium into oil prices. On Wednesday in Asian trading, US crude oil prices fluctuated higher and are currently trading around $66.15 per barrel, up about 0.8% on the day.
Trump explicitly stated that Iran's refusal to commit to completely abandoning its nuclear weapons development capabilities is currently the biggest obstacle to the agreement. According to sources, the US insists on a "zero enrichment" red line in the negotiations, while Iran has set "recognition of the right to peaceful uranium enrichment" as its bottom line.
The US and Iran are expected to hold their third round of talks this Thursday (February 26) in Geneva, Switzerland. Iranian Foreign Minister Abbas Araqchi stated last Sunday that Iran's proposal is still being refined and has not yet received final approval from the top leadership. He emphasized that the proposal will strive to balance the concerns and interests of both sides, and that the US and Iran will jointly consult on the text in Geneva to achieve a "quick agreement."
Iran has signaled limited concessions. Tehran is willing to consider the following combination of options as a demonstration of goodwill: shipping half of its highly enriched uranium abroad; diluting its remaining stockpile; and participating in the establishment of a regional uranium enrichment consortium.
But this is contingent on the United States formally recognizing Iran's right to enrich uranium and fully lifting economic sanctions against Iran.
Last Friday, Trump publicly stated that he was considering "limited airstrikes" against Iran and gave Tehran a 10-15 day ultimatum. Without an agreement, "very bad things" will happen.
The U.S. State Department ordered the evacuation of non-essential personnel from the U.S. Embassy in Beirut on Monday, which the market interpreted as a warning of potential military action.
Iranian President Masoud Pezeshkian posted on Sunday that recent negotiations have sent "encouraging signals," but emphasized that Iran is prepared for "any potential scenario."
Analysts believe this demonstrates a tough stance while leaving room for a possible diplomatic breakthrough.
Trump is delivering his State of the Union address, which is expected to focus on domestic economic issues. Recent polls show a decline in his approval ratings for his economic handling of the economy, and with the November midterm elections approaching, the Iranian nuclear issue and potential military conflict have become significant variables affecting his political capital.
Tensions in the Middle East have caused oil prices to fluctuate, and the global energy market is paying close attention to the final outcome of the Geneva talks.
(US crude oil 4-hour chart, source: FX678)
The current US-Iran negotiations are widely regarded as a "high-risk window of opportunity." Although both sides have expressed diplomatic willingness, the core difference—the recognition of nuclear enrichment rights—remains difficult to bridge. The outcome of the Geneva talks may directly determine whether the regional situation moves towards limited easing or further slides towards the brink of military confrontation.
At 10:08 Beijing time, US crude oil futures were trading at $66.16 per barrel.
The turbulent situation in the Middle East is expected to inject a risk premium into oil prices. On Wednesday in Asian trading, US crude oil prices fluctuated higher and are currently trading around $66.15 per barrel, up about 0.8% on the day.
The core disagreement remains unresolved: Zero concentration vs. the right to concentrate.
Trump explicitly stated that Iran's refusal to commit to completely abandoning its nuclear weapons development capabilities is currently the biggest obstacle to the agreement. According to sources, the US insists on a "zero enrichment" red line in the negotiations, while Iran has set "recognition of the right to peaceful uranium enrichment" as its bottom line.
The third round of Geneva negotiations is imminent.
The US and Iran are expected to hold their third round of talks this Thursday (February 26) in Geneva, Switzerland. Iranian Foreign Minister Abbas Araqchi stated last Sunday that Iran's proposal is still being refined and has not yet received final approval from the top leadership. He emphasized that the proposal will strive to balance the concerns and interests of both sides, and that the US and Iran will jointly consult on the text in Geneva to achieve a "quick agreement."
Iran has signaled limited concessions. Tehran is willing to consider the following combination of options as a demonstration of goodwill: shipping half of its highly enriched uranium abroad; diluting its remaining stockpile; and participating in the establishment of a regional uranium enrichment consortium.
But this is contingent on the United States formally recognizing Iran's right to enrich uranium and fully lifting economic sanctions against Iran.
Trump sets deadlines and airstrike threats, escalating tensions.
Last Friday, Trump publicly stated that he was considering "limited airstrikes" against Iran and gave Tehran a 10-15 day ultimatum. Without an agreement, "very bad things" will happen.
The U.S. State Department ordered the evacuation of non-essential personnel from the U.S. Embassy in Beirut on Monday, which the market interpreted as a warning of potential military action.
Iranian President: Negotiations have made progress, but we are prepared for multiple contingencies.
Iranian President Masoud Pezeshkian posted on Sunday that recent negotiations have sent "encouraging signals," but emphasized that Iran is prepared for "any potential scenario."
Analysts believe this demonstrates a tough stance while leaving room for a possible diplomatic breakthrough.
State of the Union Address Under Economic and Election Pressure
Trump is delivering his State of the Union address, which is expected to focus on domestic economic issues. Recent polls show a decline in his approval ratings for his economic handling of the economy, and with the November midterm elections approaching, the Iranian nuclear issue and potential military conflict have become significant variables affecting his political capital.
Tensions in the Middle East have caused oil prices to fluctuate, and the global energy market is paying close attention to the final outcome of the Geneva talks.
(US crude oil 4-hour chart, source: FX678)
Diplomatic window or last chance
The current US-Iran negotiations are widely regarded as a "high-risk window of opportunity." Although both sides have expressed diplomatic willingness, the core difference—the recognition of nuclear enrichment rights—remains difficult to bridge. The outcome of the Geneva talks may directly determine whether the regional situation moves towards limited easing or further slides towards the brink of military confrontation.
At 10:08 Beijing time, US crude oil futures were trading at $66.16 per barrel.
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