Trump Insists Iran Nuclear Talks Are Working — They Are Not

Senior American and Iranian officials have failed to reach agreement on the outlines of a nuclear deal, according to three people briefed on this week's negotiations in Muscat, the Omani capital. The breakdown comes despite President Donald Trump's repeated assertions that talks are "moving along very nicely" and that a grand bargain is within reach.

The disjunction between White House optimism and the reality on the ground has rattled commodity traders and dollar-denominated bond investors, who had priced in a diplomatic resolution that would ease sanctions and unlock Iranian oil shipments. Brent crude fell 1.8% to $73.40 per barrel on Thursday before recovering, while the rial dropped to a record low against the dollar on Tehran's unofficial market.

Muscat Meetings End Without Progress

Delegations led by US Middle East envoy Steve Witkoff and Iran's Atomic Energy Organisation chief Mohammad Eslami concluded two days of talks without issuing a joint statement for the first time since negotiations began in February. Omani Foreign Minister Badr al-Busaidi, who has hosted the process, described the outcome simply as "an exchange of views."

Tehran's readout of the meetings, carried by the official IRNA news agency, was notably cooler than Washington's framing. "The Iranian delegation stressed the need for verified guarantees that the United States will not withdraw from any future agreement," IRNA reported. This demand for written assurances from Congress appears to be the central sticking point that Witkoff has been unable to bridge.

Diplomatic sources in the Gulf region say Iranian Supreme Leader Ayatollah Ali Khamenei has grown increasingly sceptical about American reliability following Trump's 2018 withdrawal from the Joint Comprehensive Plan of Action, the landmark nuclear accord reached during his first term. Khamenei reiterated last month that "America cannot be trusted" in remarks to senior military commanders.

Oil Markets React to Deadlock

The prospect of Iranian crude returning to global markets had been a factor keeping oil prices suppressed in recent months. Goldman Sachs had projected that a full sanctions relief deal could add 1.3 million barrels per day to global supply by mid-2026. That assumption is now under revision.

"We are pricing in a 30% probability of a comprehensive deal by year-end, down from 55% two weeks ago," wrote senior commodity analyst Marcus Chen at Société Générale in a note to clients seen by this publication. "If talks remain deadlocked through summer, we expect Brent to test $80."

UK fuel retailers have watched the crude movements closely. Supermarket chain Morrisons warned investors last week that any sustained oil price spike would squeeze margins further after a year of intense competition in the forecourt market. BP and Shell both declined to comment on their hedging strategies.

Lebanon Complicates the Diplomatic Picture

The stalled nuclear negotiations come against a backdrop of renewed uncertainty in Lebanon, where the fragile ceasefire with Israel brokered by Washington in November remains fragile. The Hezbollah matter has become entangled with the broader US-Iran dynamic, according to two former US officials who asked not to be named discussing sensitive deliberations.

The Lebanese pound has strengthened 12% since the ceasefire, but economists at Bank Audi in Beirut caution that economic recovery remains contingent on political stability and the ability of the central bank to maintain foreign reserves. A breakdown in US-Iran talks could reignite regional tensions and undermine that fragile progress.

"Lebanon's economy cannot decouple from the wider regional picture," said Marwan Mikhael, head of research at Bank Audi. "If sanctions remain tight and Iran stays isolated, that constrains the fiscal space for any Lebanese government to act boldly."

European Powers Press for Compromise

France, Germany, and the United Kingdom issued a rare joint statement urging both sides to show "flexibility and pragmatism." The European trio, which was party to the original JCPOA, has been largely sidelined from the current process but retains significant diplomatic and economic leverage through the EU's sanctions architecture.

French President Emmanuel Macron discussed the impasse in a phone call with Trump on Wednesday, according to the Élysée Palace. A French diplomatic source said Macron had stressed that a collapsed negotiation would strengthen hardliners in Tehran and make a military dimension more likely.

What Happens Next

Both sides have signalled they will continue talking. A fifth round of discussions is expected to take place in Geneva, where Swiss officials have offered to host. However, no date has been confirmed, and the gap between American demands for immediate, verifiable dismantlement of Iran's nuclear programme and Tehran's insistence on sanctions relief first appears unbridgeable at present.

Congressional Republicans have added pressure by circulating legislation that would require any sanctions suspension to be approved by a supermajority vote, effectively tying Trump's hands on any quick executive agreement. Senate Foreign Relations Committee chair Jim Risch told reporters on Thursday that he had "serious concerns" about the direction of the talks.

Markets will next look to the International Atomic Energy Agency's quarterly report, expected around May 15, for independent verification of Iran's current nuclear activities. Any acceleration in uranium enrichment would sharply increase the stakes and could push oil prices higher regardless of diplomatic signals.