• Iran refuses to completely end uranium enrichment in indirect talks with the U.S., despite signaling limited flexibility on minor nuclear concessions.
  • U.S. President Trump demands zero enrichment permanently, missile curbs, and an end to proxy support as preconditions to avert military action.
  • The standoff escalates global oil market tensions, with Iran relocating nuclear sites underground amid fears of U.S. or Israeli strikes.

Indirect talks between the U.S. and Iran began in Oman on February 6, delayed by about an hour, with negotiations focusing primarily on Iran's nuclear program but mired in disputes over including ballistic missiles and regional proxies. U.S. officials, speaking on condition of anonymity, insist on a narrow nuclear scope, while Iranian sources claim openness to minor nuclear concessions like reducing enrichment or transferring 400kg of highly enriched uranium (HEU) under a consortium. However, Supreme Leader Khamenei has deemed enrichment a "red line," and efforts to restructure the nuclear deal have hit a snag.

U.S. President Trump demands zero enrichment permanently, missile limits, and cessation of Axis of Resistance support, viewing these as preconditions for any agreement to avoid military action. Without a deal, the U.S. could escalate strikes, with Secretary Rubio tying this to Iran's protest crackdown that killed thousands, according to rights groups. Iran, in turn, prioritizes U.S. military withdrawal from the region first and rejects missile talks as a "bigger obstacle," according to people familiar with the matter. The country is reportedly relocating and hardening nuclear sites underground against potential U.S. or Israeli strikes, a move that complicates diplomatic efforts.

Iran's nuclear standoff is escalating global oil market tensions, with a U.S. naval buildup near Iran raising fears of supply disruptions through the Strait of Hormuz. A prior Israel-Iran war in June 2025 already spiked energy prices, and regional allies like Egypt, Turkey, and Qatar have proposed a framework tying nuclear curbs to halting arms to proxies, potentially stabilizing Middle East trade if accepted. Talks follow spring 2025 U.S.-Iran negotiations to avert strikes and the June 2025 12-day Israel-Iran war, where Israel hit nuclear and missile sites and Iran fired hundreds of missiles, killing 32 Israelis. Iran paused enrichment post-war but amassed ~440kg 60% HEU beforehand, rejecting 2025 consortium proposals requiring zero domestic enrichment.

Short-term, talks may yield minor nuclear flexibility, such as a 3-year halt or HEU transfer to Russia, to delay U.S. action, but missile red lines likely stall progress. Trump has warned of strikes if no deal is reached, and experts at Critical Threats assess low odds of full U.S. preconditions being met. Iranian stakeholders face heightened crackdown fears after mass protests, with the regime using talks to project strength amid internal divisions on concessions. Attempts to reach Iranian officials for comment were unsuccessful, and conflicting reports on the agenda from various media outlets suggest factions are split, with some open to HEU transfer and others opposed.

Correction: An earlier version misstated the amount of highly enriched uranium; it is approximately 440kg, not 400kg.