DUBAI, United Arab Emirates — Oil prices surged in response to escalating geopolitical tensions as U.S. President Donald Trump adopted a notably more pessimistic stance regarding ongoing nuclear negotiations with Iran and announced the withdrawal of certain American personnel from the region.
This marks a significant departure from the previously optimistic assessments that characterized earlier rounds of mostly indirect U.S.-Iran discussions.
Both the Trump administration and Tehran have expressed intentions to reach a deal, which would represent a political triumph for Trump and provide critical economic relief for Iran, currently suffering under tight sanctions.
However, prospects for an agreement appear to be diminishing.
“They [U.S. military personnel] are being moved out because it could be a dangerous place and we will see what happens… We have given notice to move out,” Trump remarked to reporters on Wednesday, following a Pentagon directive to withdraw troops and non-essential personnel from embassies in Baghdad, Kuwait, and Bahrain.
During a New York Post podcast, Trump accused Tehran of “delaying” the talks, stating, “I’m less confident now than I would have been a couple of months ago.”
In contrast, Iran has claimed that the U.S. has not engaged earnestly and is failing to respect Iran’s right to enrich uranium for peaceful purposes.
Risk of Conflict
Trump has previously warned that should negotiations falter, military action—either by the U.S. or Israel—could target Iranian nuclear facilities. In response, Iran’s defense minister expressed hope for successful negotiations while cautioning that military retaliation would follow any aggression.
“In that case, America will have to leave the region, because all of its bases are within our reach. We will target all of them in the host countries without hesitation,” he stated to Iranian media.
On Thursday, the IAEA Board of Governors, the UN’s nuclear watchdog, passed a resolution declaring that Iran is in non-compliance with its nuclear obligations for the first time in nearly 20 years.
This comes as U.S. Middle East envoy Steve Witkoff is scheduled to meet Iranian Foreign Minister Abbas Araghchi in Oman on Sunday for further dialogue.
Amid the ongoing talks, it was reported that Israel is considering military action against Iran shortly, according to sources cited by NBC News.
The implications of a military confrontation between Israel and Iran—a nation of 93 million—could be profound, affecting both regional stability and global markets, according to analysts.
Yet, many experts believe a military escalation is still avoidable for the present. Some commentators suggest that the recent troop withdrawals could be part of strategic pressure ahead of the upcoming U.S.-Iran nuclear discussions.
The Number One Roadblock
The primary obstacle to reaching a deal remains Iran’s domestic uranium enrichment, which is dual-use for both energy and potential weaponization.
Initially, Trump indicated a willingness to allow Iran lower-level enrichment for energy purposes, but has since asserted that any enrichment beyond zero is unacceptable.
This stance poses a significant challenge for Iran, which insists on its right to maintain a civilian nuclear program, a right enshrined in the Nuclear Non-Proliferation Treaty (NPT) since its accession in 1970.
However, concerns regarding Iran’s actual nuclear intentions persist. Under the 2015 Joint Comprehensive Plan of Action (JCPOA), Iran agreed to limit its enriched uranium to 3.67% purity at 300 kilograms, sufficient for a civilian nuclear program.
Recent reports indicate that Iran’s enrichment has escalated to 60% purity, a level alarmingly close to the 90% threshold considered suitable for weapons grade. IAEA Director General Rafael Grossi remarked in 2021 that “a country enriching at 60% is a very serious thing,” highlighting the implications of such enrichment levels.
Potential for Compromise?
Despite Trump’s hardline stance against any Iranian enrichment, several proposals have been discussed that could serve as a compromise. One suggestion involves Iran joining a regional nuclear consortium, allowing for low-level enrichment while committing to halt enrichment entirely at a later date, potentially keeping its facilities operational but not actively enriching.
However, analysts note that this U.S. proposal appears to lack the coherence needed for successful negotiation, with Gregory Brew, a senior Iran and energy analyst at Eurasia Group, calling it “more a series of ideas than a concrete plan” at this time.
Brew added that even temporary enrichment conditions would not satisfy Iran, which seeks to safeguard its enrichment rights indefinitely.
Moreover, Iranian officials have expressed discontent regarding the lack of substantive U.S. engagement on sanctions relief, a critical issue for Iran as it seeks economic recovery.
The threat by Iran to potentially target U.S. assets in the region carries significant weight, as noted by Trita Parsi, executive vice president at the Quincy Institute for Responsible Statecraft.
He pointed out that the missiles Iran utilized during recent strikes on Israel demonstrated considerable effectiveness, suggesting the potential for severe consequences should confrontation ensue.
“If there is a confrontation, and if the Iranians make true on their threats to target American bases, this is going to end up becoming a very, very devastating confrontation,” Parsi stated. He added that Trump supporters are increasingly concerned that he could jeopardize his presidency over these tensions, especially when a diplomatic resolution may be achievable.
