Iran delays nuclear talks as Israeli forces push 10km into Lebanon

Iran postponed nuclear negotiations in Switzerland after Israeli troops advanced roughly 10 kilometers into southern Lebanon, violating the ceasefire memorandum and threatening the US-Iran deal signing scheduled for Friday.

Iran delayed nuclear talks in Switzerland Wednesday as Israeli forces pushed 10 kilometers into southern Lebanon, violating the ceasefire memorandum and threatening the US-Iran deal signing scheduled for Friday.

"The Lebanon issue remains core to the negotiations and will directly determine whether talks continue or are suspended," a person familiar with the matter said, after Iran informed the US and mediators of its decision.

The Iranian delegation had been preparing to depart for a 60-day negotiation round before suspending travel. Israel's advance into southern Lebanon — roughly 10 kilometers beyond the border — violates the first clause of the memorandum of understanding, the person said. The development comes as the G7 summit in Evian concluded with leaders endorsing the US-Iran framework, and as Trump said a ceremonial signing could occur as soon as Friday.

The delay injects fresh uncertainty into a deal that had already buoyed equity markets. Trump said Wednesday that "every time we talked about the possibility of peace, the stock market shot up like a rocket ship." The Strait of Hormuz, through which about 21% of global oil trade passes, remains a flashpoint if negotiations collapse entirely.

A Narrowing Diplomatic Window

The last time US-Iran nuclear talks collapsed — after the 2018 US withdrawal from the Joint Comprehensive Plan of Action — crude oil prices rose sharply as geopolitical risk premiums repriced across energy markets. A similar dynamic could unfold if the current delay hardens into a full suspension.

The Israeli military's push into southern Lebanon marks one of the deepest ground operations since the 2006 war. Israel has issued new occupation maps and is in talks with Washington over troop deployment, according to reports. The advance threatens to open a second front of instability just as the US and Iran were moving toward a formal end to hostilities.

The timing is particularly delicate. The US and Iran had been expected to sign a formal ceasefire agreement Friday in Switzerland, with Trump saying a copy had already been sent to Israel. The G7 summit in Evian produced what French President Emmanuel Macron called "unprecedented convergence" among leaders on Ukraine and the Middle East, with Italy's Premier Giorgia Meloni saying the US-Iran agreement "clearly had a positive influence" on the summit's climate.

What Markets Are Watching

For investors, the key variable is whether the delay is tactical — a negotiating pressure tactic by Tehran — or structural, signaling the deal's collapse. The Strait of Hormuz, through which about 21% of global oil trade passes, remains the central risk. Brent crude, which had been pricing in a partial normalization of Iranian supply, could see renewed upward pressure if the talks stall indefinitely.

Gold typically benefits from geopolitical uncertainty and could attract safe-haven inflows if the diplomatic track falters. Defense sector stocks may also see interest as Middle East tensions persist. Trump said Wednesday the US would not spend "10 cents" to help Iran rebuild, even as leaked copies of the agreement suggest at least $300 billion in reconstruction aid.

The coming days will be critical. If the Iranian delegation resumes travel to Switzerland, the delay may prove temporary. If not, the diplomatic breakthrough that G7 leaders celebrated in Evian could unravel, with consequences for oil markets, regional stability, and the broader risk appetite across global financial markets.

This article is for informational purposes only and does not constitute investment advice.