Grégoire Kounowski, Head of Advisory by Norman K.
Although negotiations are still ongoing in Geneva between the United States and Iran, each passing week highlights the antagonistic positions of these players and brings them closer to a major conflict.
While Washington and Tehran play the diplomatic card, the former is deploying the largest air force in the Middle East since the invasion of Iraq in 2003, while the latter is conducting military exercises in the highly strategic Strait of Hormuz. In 2025, nearly 13 million barrels passed through the strait every day, representing 31% of global oil flows transported by sea. Iran has also announced joint naval exercises with Russia in the Sea of Oman, close to US ships.
In the event of military escalation, the fate of Iran’s hydrocarbon infrastructure, one of the world’s top ten oil producers, also raises questions.
American negotiators have set three preconditions for an agreement: the elimination of the military nuclear programme, the dissolution of proxies in the region (e.g. Hezbollah, Houthis, etc.) and the dismantling of ballistic missiles. Iran is unlikely to accept any of these points, especially its nuclear programme, which is considered a matter of survival by the Iranian authorities.
‘There are many reasons and arguments in favour of striking Iran,’ the White House spokeswoman said on Wednesday, adding that Tehran ‘would be well advised to reach an agreement’. The day before, US Vice-President J.D. Vance had already noted Iran’s persistent differences on US ‘red lines’. US officials are therefore increasingly pessimistic about the possibility of an agreement.
On the markets, the likelihood of military intervention is supporting the defence and commodities sectors. At the same time, the lack of progress in negotiations on the war in Ukraine is reinforcing this effect. Faced with these growing threats, oil rose 4% on Wednesday, with Brent exceeding $70. The disruption that would result from intervention in oil trade and transport also contributed to pushing the price of gold back above $5,000 an ounce, confirming that the precious metal remains one of the safe havens favoured by investors.
