Iran Says Nuclear Deal Is 'Within Reach.' Oil Markets Aren't So Sure.

Oil traders heard "within reach" and immediately sold.

That's what happened Tuesday when Iran's Foreign Minister Abbas Araqchi told reporters that a nuclear deal with the United States was achievable — "but only if diplomacy is given priority."

Brent crude dropped 1%. Markets read optimism. But everyone else is reading fine print.

Why This Moment Matters

The United States and Iran haven't had a functioning nuclear agreement since 2018, when Trump pulled out of the Obama-era deal. Since then: sanctions have choked Iran's economy, Tehran has enriched uranium to near-weapons-grade levels, and the region has armed itself like it's expecting war.

Now Trump is back in office — and surprisingly, both sides are talking again. The third round of negotiations happens Thursday in Geneva, mediated by Oman.

This isn't the old multilateral process with Europe, Russia, and China at the table. It's just Washington and Tehran, with Oman passing notes between them. That makes it faster, messier, and far more fragile.

What's Actually on the Table

Iran wants sanctions lifted — the ones that have frozen its oil exports, locked its banking system out of global finance, and gutted its economy. The US wants Iran's nuclear program rolled back to the point where building a weapon becomes impossible without months of warning.

Those are the basics. But there's more.

Trump's team reportedly wants limits on Iran's missile program and its support for armed groups across the region. Tehran says those topics aren't part of these talks. They're only discussing the nuclear file.

That mismatch is dangerous. When both sides think they're negotiating different deals, someone walks away disappointed.

The Military Buildup Nobody's Ignoring

Araqchi's statement came with a caveat: diplomacy must be "given priority." That's diplomatic speak for "stop threatening us."

The US has deployed over 40,000 troops to the Middle East in recent weeks. Carrier strike groups. Bombers. Bases across the Gulf are on heightened alert. American media reported last week that the Pentagon had contingency plans ready for strikes as early as this weekend.

Iran hasn't been sitting still either. It held joint naval drills with Russia. Its proxies remain active across Iraq, Syria, Yemen, and Lebanon. And Supreme Leader Ali Khamenei — the person who actually decides Iran's red lines — rejected Trump's negotiation terms on February 17.

So when Araqchi says "within reach," he's speaking for the Foreign Ministry. That doesn't mean Tehran's military commanders or the Supreme Leader's office see it the same way.

Europe, the Gulf, and Everyone Watching Oil Prices

For Europe, this matters beyond security. A deal could bring Iranian oil back to global markets — about a million barrels per day. That would ease energy prices, especially for economies still adjusting to years of volatility.

Gulf states are watching with mixed feelings. Saudi Arabia and the UAE don't want a nuclear-armed Iran on their doorstep. But they also don't want another regional war that sends oil prices haywire and turns the Middle East into a battleground again.

Israel has made its position clear: any deal that doesn't address Iran's missile program and proxy network is unacceptable. That puts Washington in an awkward spot — trying to satisfy both Tehran's demands and its closest Middle Eastern ally's concerns.

What Happens Next

Thursday's talks in Geneva will reveal whether "within reach" was optimism or spin.

The gap between the two sides is still wide. Iran wants comprehensive sanctions relief before making nuclear concessions. The US wants verifiable nuclear rollbacks before lifting major sanctions. Neither side has shown willingness to blink first.

And then there's the elephant in the room: trust.

Trump withdrew from the last deal unilaterally. Biden tried to revive it and failed. Iran spent the past seven years rebuilding its nuclear capacity. Both sides have reasons to doubt the other will follow through.

Markets reacted to the headline. But the real test is whether diplomacy can compete with decades of mistrust, a massive military buildup, and domestic politics on both sides that punish compromise.

If Thursday's talks break down, we're back to escalation. If they succeed, the world gets a rare example of diplomacy working when nobody expected it to.

The next 48 hours will tell us which path we're on.