U.S.-Iran negotiations once "nearly collapsed" but took a turn, leaving international oil prices dizzy and confused

According to reports from CCTV News and other media outlets, during a few hours in the early hours of Thursday Beijing time, the US-Iran negotiations, originally scheduled for this Friday, nearly collapsed but have temporarily returned to the right track.

As a result, international oil prices experienced significant intraday fluctuations. Brent crude oil surged over 3% suddenly at 1:30 a.m. Thursday, then sharply retreated around 4:00 a.m. However, due to the further decline in expectations that the US and Iran can reach an agreement, Brent crude still remains over 1% higher.

(Brent crude oil minute chart, Source: TradingView)

Behind the market rumors and fluctuations is the intense diplomatic game between the US and Iran.

As initially perceived at the beginning of this week, against the backdrop of the US threatening military action against Iran, the two countries agreed to hold talks this Friday in Istanbul, with nearby countries participating as observers. The US and Iran will hold bilateral talks on the nuclear agreement, followed by multilateral talks on Iran’s ballistic missiles, military proxies, and other issues.

Subsequently, Iran proposed on Tuesday to change the talking location to Oman and only conduct bilateral talks with the US to ensure the negotiations focus solely on nuclear issues.

According to informed US officials, the US initially responded to this proposal with openness but told Iran on Wednesday, “Either proceed with the current plan or don’t talk at all.” Iran then responded, “Then let’s not talk at all.”

Iranian officials, through state media, indicated that the reason for canceling the negotiations was due to the US imposing new conditions and disagreements over negotiation issues, rather than the location of the talks.

This was followed by the global financial markets witnessing a rapid rise in oil prices and a continued sell-off in US stocks, led by technology shares.

However, at 3:48 a.m. Beijing time, Iranian Foreign Minister Amir Abdollahian suddenly posted on social media that the nuclear talks with the US are scheduled to take place around 10 a.m. on Friday in Muscat, Oman, and thanked the Omani brothers for making all necessary arrangements.

(Source: X)

Based on current information, as the US and Iran “walk away from the table,” concerns about Trump turning to military options have sharply increased in the Middle East. At least nine countries in the region have engaged in high-level emergency lobbying of the White House, urging the US not to cancel the Friday meeting.

An American official revealed, “They asked us to keep the meeting and listen to what Iran has to say. We have told the Arab side that if they insist, we will attend the talks, but we are very skeptical about it.”

However, considering the Trump administration’s rather vague goals regarding Iran, coupled with Iran’s strategic policies, officials from multiple Middle Eastern countries involved in mediation said, they are also unsure what the US and Iran truly want from the talks, nor whether there is really a path to reach an agreement. The main goal of mediators at this stage is to facilitate a broad statement from the US and Iran, indicating their commitment to diplomacy, agreeing to de-escalate the situation, and cease hostilities.

Alan Eyre, former spokesperson for the US State Department on Persian affairs and former Iran nuclear negotiations envoy, commented on Wednesday: “This is an unprecedented situation, partly because US strategic uncertainty and inconsistency will amplify the potential consequences of Iran’s decision-making.”

(Source: Caixin)