At the beginning of 2026, the Middle East will enter a high-pressure state of diplomatic negotiations and military confrontation. On one hand, the second round of indirect negotiations between the United States and Iran was held in Geneva, Switzerland on February 17th, releasing a signal of easing tensions. On the other hand, the US military deployed two aircraft carriers and five generations of aircraft in close proximity, while Iran conducted live fire exercises in the Strait of Hormuz. The balance between war and peace continues to swing, directly affecting global oil prices, gold, and various market trends.

Core of the oil market: Geopolitically driven pricing, negotiation driven fluctuations

The current global oil market fundamentals are loose, with the short-term oil price center maintained at $60-70 per barrel, but geopolitics has become the pricing core. The core law of the oil market in 2026 is clear: if negotiations ease, oil prices will fall; if confrontation escalates, oil prices will jump; the situation in the Middle East directly determines the stability of the global energy market.

US Iran Military Confrontation: Extreme Deterrence and Asymmetric Countermeasures

Before and after the Geneva negotiations, the US military completed a large-scale sea and air assembly, with a clear intention to pressure negotiations. The USS Lincoln is stationed in the Arabian Sea, while the USS Ford provides emergency support to form a dual carrier battle group, equipped with Tomahawk missiles that can cover the entire territory of Iran; On February 16th, 18 F-35A stealth fighter jets rushed to the Middle East, deploying Patriot and THAAD anti missile systems simultaneously. There were about 40000 to 60000 troops stationed in the Middle East, with a focus on long-range precision strikes and no ground warfare.

At the same time as the negotiations, Iran held a live fire exercise in the Strait of Hormuz, demonstrating its countermeasures: the Revolutionary Guard Navy deployed a rapid response force to practice electronic warfare, maritime blockade, and saturation strikes, while drone swarms, high-speed boats, and shore based anti-ship missiles participated simultaneously. Thousands of ballistic missiles were aimed at US military bases and Israel, relying on a comprehensive defense system and adhering to the strategy of "no initiative, no compromise", and could counterattack opponents by blocking the strait.

Geneva negotiations: Short term cooling, differences not resolved

On February 17th local time, with the mediation of Oman, the United States and Iran held the second round of indirect negotiations. Both sides reached a consensus on the guiding principles of the negotiations and agreed to continue contact within two weeks. But the core disagreement still lies: Iran insists on peaceful nuclear rights and missile autonomy, while the United States demands strict control over Iran's nuclear program and verifiability. After negotiations, oil prices plummeted by 2% -3% in the short term, and the geopolitical risk premium fell but was not completely eliminated. The pattern of negotiating and increasing troops at the same time has not changed.

Situation assessment and oil price prediction

Based on the dynamics of both sides, the conclusion of the situation is clear: the probability of a full-scale war is almost zero, the probability of limited air strikes or friction is moderately high, and the period from March to July 2026 is a high-risk window. Iran's nuclear breakthrough, attack on the US military, blockade of the strait, and breakdown of negotiations may all trigger an escalation of the situation. In the future, there will be a trend of "talks and pressure, using violence to promote talks, and friction becoming normalized".

The oil prices and market predictions under three scenarios are as follows:

1. Continued negotiations+limited friction (most likely): Brent oil prices range from $78 to $85 per barrel, gold prices range from $5100 to $5300 per ounce, and the energy, military, and gold sectors are experiencing temporary strength;

2. Negotiations are stalled+Iran's exports are hindered: Brent oil prices range from $90-105 per barrel, gold prices range from $5300-5500 per ounce, inflation is rising, and global stock markets are under pressure;

3. Extreme situation (Strait blockade): Brent oil prices range from $120 to $150 per barrel (short-term surge to $160), gold prices exceed $5800-6000 per ounce, global markets fluctuate, and safe haven assets become safe havens.

In 2026, the situation in the Middle East will be the focus of global attention: the Geneva negotiations have only achieved short-term cooling, the US Iran military standoff has existed for a long time, the Strait of Hormuz remains the most vulnerable lifeline for global energy, and fluctuations in the oil market are directly determined by the progress of negotiations and military actions. Keeping a close eye on the dynamics in the Middle East and laying out energy and safe haven assets are the core themes.

Seeking peace through struggle leads to peace; seeking peace through compromise leads to peace's demise! (This article is from the official website of Jian Dao www.seetao.com. Reproduction without permission is prohibited, otherwise it will be prosecuted. Please indicate Jian Dao website+original link when reprinting.) Jian Dao website Middle East column editor/Yin Jiahui