Oil Settles Higher as Vance Signals Iran Failed to Meet U.S. Nuclear Red Lines

Vice President JD Vance said Tuesday that Iran did not address key U.S. demands during nuclear negotiations in Geneva, adding that President Donald Trump retains the option of military force if diplomacy fails.

Speaking to Fox News, Vance said the discussions produced agreement to continue talks but that Tehran had not acknowledged specific conditions set by the White House. He stated the administration has made clear that military action remains available if Iran’s nuclear program is not curtailed through negotiation. President Trump said last week that additional U.S. naval assets were deployed to the region as a precaution should talks break down. The USS Abraham Lincoln is currently stationed in the Middle East, and the USS Gerald Ford is en route. “If we don’t have a deal, we’ll need it,” Trump said outside the White House.

U.S. envoys Steve Witkoff and Jared Kushner met Iranian officials in Geneva on Tuesday. Iran’s foreign minister, Abbas Araghchi, described the discussions as constructive and said the sides reached general agreement on guiding principles, according to Iranian state media. Separate reporting from Axios, citing unnamed sources, said any U.S. military campaign against Iran would likely extend for weeks and resemble a broader conflict rather than a limited strike operation.

In parallel, Iran’s Revolutionary Guard conducted military exercises in the Strait of Hormuz this week. Iranian state media reported that traffic in part of the waterway was temporarily closed during drills. Data from energy analytics firm Kpler indicated it did not observe a halt in vessel traffic on Tuesday, according to analyst Matt Smith.

The Strait of Hormuz handles roughly one-third of global seaborne crude exports, making it a focal point for energy markets during periods of regional tension. Oil prices rose following the remarks from U.S. officials. U.S. crude settled at $65.19 per barrel, up $2.86, or 4.59%. Brent crude closed at $70.35 per barrel, gaining $2.93, or 4.35%.

Markets had closed lower the previous session after comments from Iran’s foreign minister were interpreted as signaling potential diplomatic progress. Wednesday’s gains reflected renewed concern that negotiations may not yield a near-term agreement.

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