Tensions between the US and Iran persist amid disputes over uranium enrichment in ongoing nuclear negotiations, as market participants assess the possibility that an Israeli strike could lift oil prices by around 10%.
US President Donald Trump said the nuclear talks launched on February 26 have not progressed as hoped, alleging that Tehran has not demonstrated a “good faith and transparent” approach. Trump reiterated that the US does not want Iran to obtain nuclear weapons but prefers a diplomatic resolution, though the two sides remain far apart on key terms.
Following these developments, reports indicated that Israel launched a pre-emptive strike against Iran. Air-raid sirens were heard across Israel at around 08.14 local time, with mobile alert systems activated nationwide. Some Israeli media reports suggested the operation was conducted jointly by the US and Israel, a claim later echoed by Trump, who said a major operation had been launched against Iran.
The central dispute in negotiations remains Tehran’s demand to maintain a limited nuclear program in exchange for the lifting of international sanctions, while Washington is seeking a complete halt to Iran’s uranium enrichment activities.
- US expands military presence in Middle East as Iran talks continue
The US continues to increase its military presence in the Middle East alongside diplomatic contacts with Iran.
Trump said on February 19 that negotiations with Iran could become clearer within 10-15 days, warning that failure to reach a meaningful agreement could lead to severe consequences.
In his State of the Union address, Trump highlighted Iran’s long-range missile development program, stressing that the US prefers a diplomatic solution but will not allow Tehran to acquire nuclear weapons.
Following talks in Geneva, Trump said the potential outcome of any military intervention, including whether it could trigger regime change in Iran, remains uncertain. He added that while he would prefer to achieve objectives “without military action,” force may sometimes be necessary.
Open-source intelligence reports indicate that more than 330 US military aircraft have been deployed to the region, a figure that reportedly increased by about 10% over two days. Analysts say the deployments aim to ensure rapid operational response capability while reinforcing diplomatic leverage.
- Geopolitical risk sentiment rises in markets
Military activity in the Middle East is raising global geopolitical risk perceptions, supporting energy prices amid concerns over supply security.
Brent crude rose about 3% on the last trading day of February, closing at $73.12 per barrel, the highest level since June 2025. West Texas Intermediate (WTI) crude also gained 2.7%, trading near $67.22 per barrel.
Market volatility is expected to increase if regional tensions escalate. Analysts note that the policy stance of the US favors relatively lower oil prices, suggesting that a potential military escalation against Iran is unlikely to be sustained if it risks creating prolonged upward pressure on global energy costs.
- Oil prices could rise about 10% in case of escalation
However, geopolitically driven oil price increases are not expected to remain persistent, Osama Rizvi, analyst at US-based Primary Vision told Anadolu.
Rizvi noted that the magnitude of market shocks will depend on the severity and scope of any potential attack. He added that the US is unlikely to target energy infrastructure in a way that would sustain long-term price pressure, citing potential impacts on employment and consumer spending.
“I believe the US will avoid targeting oil infrastructure, still, the impact could be a 10% increase in Brent prices. If the strike is very limited, we may see oil prices falling on Monday,” Rizvi said.
Rizvi also warned that disruption of the Strait of Hormuz could trigger a sharp price surge, potentially pushing crude oil toward $150 per barrel. Such a scenario could reduce global economic growth by about 1.5%, lift gold prices above $6,500 per ounce, and push US inflation back near 4.5%.
He emphasized that prolonged conflict in the Middle East would disproportionately affect emerging markets, where energy dependence can reach 80-95%, potentially intensifying food inflation and cost-of-living pressures.
“If the conflict deepens to involve other regional actors, then we can look at something of a regional war, especially with the involvement of Saudi Arabia and Israel,” he concluded.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
