ICYMI - Iran signals readiness for US nuclear talks as military tensions rise

  • Any credible (credible is the keyword here!) progress toward talks could ease geopolitical risk premiums in oil and regional assets, though failure would likely refocus markets on escalation and supply disruption risks.
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Iran signalled readiness for nuclear talks with the US as envoys prepare to meet in Istanbul, even as military tensions and strike risks remain elevated.

Summary:

  • Iran signalled readiness for nuclear talks with the US amid rising military pressure

  • Senior US and Iranian envoys are expected to meet in Istanbul later this week

  • Talks come as US forces mass in the region and strike risks remain elevated

  • Washington is pushing for limits on uranium enrichment and missile activity

  • Regional allies are engaged as fears grow of escalation or renewed unrest in Iran

Iran has indicated it is prepared to enter negotiations with the United States over its nuclear programme, as diplomatic activity intensifies against a backdrop of heightened military tensions across the Middle East.

Iran’s foreign minister, Abbas Araghchi, said Tehran remains open to diplomacy, provided talks are conducted with mutual respect and recognition of national interests. His comments come as both sides are reportedly preparing to dispatch senior envoys to Istanbul for high-level discussions later this week, potentially marking the first direct engagement between US and Iranian officials since last year.

The diplomatic push coincides with a significant US military build-up in the region. Donald Trump has ordered warships and aircraft into position amid warnings that Washington could strike Iranian targets if negotiations fail. Trump has suggested that talks are already under way and that a deal could avert military action, while also reiterating demands that Iran halt production of highly enriched uranium and curb its ballistic missile programme.

According to regional and US media reports, Araghchi is expected to meet Trump’s envoy, Steve Witkoff, in Istanbul alongside representatives from several Arab and Muslim countries, including Qatar, Saudi Arabia, the United Arab Emirates and Egypt. No formal timetable has been announced, but Iranian officials said discussions are being finalised and could conclude within days.

The talks would follow a turbulent period marked by direct military confrontation. Last year, Israeli and US forces struck Iranian nuclear and missile facilities after Iran launched hundreds of ballistic missiles toward Israel during a brief but intense conflict. Satellite imagery released recently suggests Iran has since moved to repair damage at key nuclear sites, including Isfahan and Natanz.

Behind the diplomatic push lies mounting concern in Tehran that even a limited US strike could destabilise the regime. Iranian officials have reportedly warned that renewed military action could reignite widespread protests, which have already exposed deep domestic discontent following economic deterioration, high inflation and currency weakness.

Regional allies are also bracing for potential fallout. Saudi and Israeli officials have held discussions with US defence officials, while Israel has warned it is prepared for all scenarios and threatened severe retaliation if attacked. With tensions high and diplomacy fragile, markets are watching closely for any signal that talks could ease the risk of a broader regional conflict.

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