GEOPOLITICAL ANALYSIS
Diplomatic Implications and the Strategic Stakes for Singapore
Published: 23 February 2026 | Next Scheduled Talks: 26 February 2026, Geneva | Omani Mediation
Executive Summary
The United States and Iran are set to resume nuclear negotiations on 26 February 2026 in Geneva, under the facilitation of Omani mediators, following a first round of talks that ended with significant gaps still to be bridged. The renewed diplomatic engagement unfolds against a backdrop of acute military tension — two US carrier strike groups are deployed in the Middle East — and a hard deadline issued by President Donald Trump of 10 to 15 days for a deal. Iranian Foreign Minister Abbas Araghchi has expressed cautious optimism while reaffirming Tehran’s position that uranium enrichment is a sovereign right, directly contradicting US special envoy Steve Witkoff’s insistence on ‘zero enrichment’ as a non-negotiable precondition.
This article provides an in-depth analysis of the state of negotiations, the historical and structural context of the US–Iran nuclear impasse, the coercive diplomatic strategy being employed, and — critically — the downstream implications for Singapore, a small open economy deeply integrated into global energy and trade networks and reliant on stability across the Middle East corridor.
I. Background: The Long Arc of the Nuclear Dispute
1.1 From the JCPOA to the Present Impasse
The 2015 Joint Comprehensive Plan of Action (JCPOA) represented the most significant diplomatic breakthrough in the US–Iran nuclear file in decades. Under its terms, Iran accepted rigorous International Atomic Energy Agency (IAEA) monitoring and substantial limitations on its enrichment activities in exchange for phased relief from multilateral sanctions. The deal, brokered through the P5+1 format (US, UK, France, Russia, China, and Germany), was widely regarded as a landmark of multilateral arms control diplomacy.
The architecture of that agreement was dismantled in May 2018, when the Trump administration unilaterally withdrew from the JCPOA and reimposed comprehensive sanctions under its ‘maximum pressure’ policy. Iran responded incrementally, violating the deal’s enrichment caps in successive steps. By early 2020, Iran had begun enriching uranium to 60% purity — a level with no credible civilian justification — and its stockpile of enriched uranium had grown to a volume that, if further enriched, would be sufficient for multiple nuclear devices. Talks under the Biden administration to revive the JCPOA (the JCPOA-2 negotiations in Vienna) collapsed in 2022 over Iranian demands for sanctions guarantees and the removal of the IRGC from the US Foreign Terrorist Organization designation.
The current 2026 negotiations therefore represent the third major attempt since 2015 to construct a durable diplomatic framework, this time under a more adversarial diplomatic climate, in the aftermath of Israeli and US strikes on Iranian nuclear facilities and air defence infrastructure in 2025, and with Iran having significantly advanced its nuclear programme in the interim.
1.2 Military Escalation as Diplomatic Leverage
President Trump’s deployment of two carrier strike groups to the region, alongside explicit public statements about considering limited strikes on Iran, represents a textbook application of compellence theory: using the credible threat of military force to alter an adversary’s calculus at the negotiating table. The strategy is not new — the Obama administration maintained a similar posture during the JCPOA negotiations — but the Trump administration’s willingness to make the threat explicit and public introduces additional instability into the diplomatic process.
Academic scholarship on coercive diplomacy (Schelling, 1966; Pape, 1996) consistently identifies the danger of ‘audience cost’ dynamics: when leaders publicly commit to coercive demands, backing down becomes domestically costly, reducing the flexibility required to close a deal. The same dynamic applies to Iran’s domestic politics, where Araghchi and the Rouhani-aligned technocratic faction face hardline pressure to resist any agreement that can be portrayed as capitulation under threat.
“I believe that still, there is a good chance to have a diplomatic solution which is based on a win-win game and a solution is at our reach.” — Iranian Foreign Minister Abbas Araghchi, CBS Face the Nation, 23 February 2026
II. The Core Negotiating Positions and Fault Lines
2.1 The Enrichment Deadlock
The most fundamental fault line in the current negotiations is the question of uranium enrichment. US Special Envoy Steve Witkoff stated unequivocally on Fox News that ‘zero enrichment’ is a non-negotiable US demand. This position — if maintained — goes substantially beyond the JCPOA’s terms, which permitted Iran to enrich uranium to low levels (3.67%) under strict monitoring. Witkoff’s position is also reportedly at odds with a semi-official Iranian Students’ News Agency (ISNA) report claiming that the US had already accepted Iran’s right to continue enrichment, a discrepancy that may reflect deliberate ambiguity by both sides to preserve negotiating flexibility, or genuine internal incoherence in the US position.
For Iran, enrichment is not merely a technical matter but a sovereignty issue deeply embedded in its national identity and the legal framework of the Nuclear Non-Proliferation Treaty (NPT). Article IV of the NPT guarantees all signatory states the ‘inalienable right’ to develop nuclear energy for peaceful purposes. Tehran has consistently invoked this provision. Any agreement requiring full dismantlement of Iran’s enrichment infrastructure would require extraordinary domestic political cover that the current government likely cannot provide.
2.2 The IAEA Board and Potential UN Security Council Referral
The diplomatic timeline is further complicated by the IAEA Board of Governors meeting scheduled for 2 March 2026 in Vienna. Diplomats are expected to consider a resolution censuring Iran for its non-cooperation with IAEA inspectors — a process that could escalate to a UN Security Council referral under the NPT’s dispute resolution mechanism. Such a referral would activate the JCPOA’s ‘snapback’ provision for those states still party to the agreement, automatically re-imposing pre-2015 UN sanctions. This institutional clock is a significant source of pressure on both parties to reach a preliminary agreement before 2 March.
2.3 The Russia–Iran Arms Dimension
Complicating the diplomatic calculus further is a Financial Times report, published on the same day as the announcement of the resumed talks, that Iran has concluded a €500 million agreement to acquire thousands of advanced shoulder-fired missiles from Russia over three years. This development will intensify pressure from European and US negotiators, who are likely to insist that any nuclear deal address Iran’s conventional military posture and its relationship with Moscow — demands Iran has already explicitly rejected. Araghchi confirmed that ‘right now, we are negotiating only nuclear and there is no other subject,’ signalling Tehran’s intention to ringfence the nuclear file from broader regional and military discussions.
III. Singapore: Structural Exposure and Strategic Calculus
3.1 Energy Security and the Strait of Hormuz
Singapore’s most direct exposure to an Iran–US conflict lies in its dependence on Middle Eastern energy flows. Approximately 80% of the crude oil transiting the Strait of Hormuz is destined for Asian markets, with Singapore functioning as the primary refining and petroleum trading hub for Southeast Asia. Singapore’s Jurong Island petrochemical complex and its role as the world’s third-largest oil refining centre make it acutely sensitive to any disruption in Middle Eastern supply chains.
In a scenario involving US military strikes on Iranian nuclear or military infrastructure, Iran’s most credible retaliatory option is the closure or mining of the Strait of Hormuz, through which approximately 21 million barrels of oil pass daily. Even a temporary closure — or credible threat thereof — would produce immediate and severe oil price spikes. The 1973 Arab oil embargo, which caused a 400% increase in oil prices, offers a historical reference point for the cascading effects on energy-import-dependent economies. Singapore, with no domestic energy production, would face significant inflationary pressures, rising cost-of-living indices, and potential disruption to energy-intensive manufacturing sectors.
Key Figure ~21 million barrels of oil transit the Strait of Hormuz daily. A sustained closure would represent the most severe energy supply disruption since the 1973 oil crisis.
3.2 Trade and Port Operations
Singapore is the world’s second-busiest container port by throughput and a critical node in global supply chains. Middle East trade — including with Iran, the GCC states, and overland routes through the region — constitutes a meaningful share of Singapore’s cargo flows. A broader regional conflict would trigger rerouting of shipping lanes, insurance premium spikes, and potential temporary closures of key corridors, all of which would impose transactional costs on Singapore’s port and logistics sector.
The Monetary Authority of Singapore (MAS) has consistently flagged geopolitical risk — particularly Middle Eastern instability — as one of the primary external risk factors in its Financial Stability Reviews. The Singapore Dollar’s safe-haven characteristics provide some buffer against capital flight during regional risk events, but sustained energy price inflation could erode the current account surplus that underpins the MAS’s exchange rate management framework.
3.3 Financial Sector and Sanctions Compliance
Singapore’s position as a regional financial centre brings with it significant compliance obligations under the US sanctions regime on Iran. Singapore-based financial institutions are exposed to secondary sanctions risk if they are found to facilitate transactions with designated Iranian entities. The Monetary Authority of Singapore has invested substantially in its sanctions compliance architecture since the JCPOA’s collapse, but a re-escalation of tensions — or a breakdown in talks — would require renewed vigilance and potentially restrict legitimate trade financing flows in the broader region.
Conversely, a successful nuclear deal that leads to a partial or full lifting of US sanctions on Iran would open substantial commercial opportunities for Singapore’s banking and trade finance sectors, given Singapore’s traditionally strong commercial relationships with both the US and Iranian business communities.
3.4 Singapore’s Diplomatic Posture and Non-Alignment Tradition
Singapore occupies a carefully calibrated position in its approach to great power rivalries. As a small state with an existential interest in the rule of law and multilateral institutions, Singapore has consistently supported the IAEA’s role in nuclear non-proliferation and has been a vocal advocate for the efficacy of international law in managing state behaviour. At the same time, Singapore’s deep economic integration with both the United States and the wider Middle East means it has a direct material interest in a negotiated resolution.
Singapore is unlikely to make public statements strongly favouring either party in the current negotiations — consistent with its long-standing practice of avoiding alignment in superpower disputes. However, Singapore’s diplomacy, channelled through multilateral forums such as the IAEA Board of Governors (where Singapore holds consultative relationships), ASEAN, and the UN, will quietly favour a framework that preserves Iranian compliance with the NPT and avoids military escalation.
3.5 Omani Mediation and Singapore’s Parallel Experience
The selection of Oman as mediator is notable and carries lessons relevant to Singapore’s own diplomatic tradition. Oman has maintained diplomatic relations with Iran continuously since the 1979 Islamic Revolution and has acted as an intermediary in multiple US–Iran back-channel negotiations, including the secret talks that preceded the JCPOA. Oman’s success as a mediator reflects its ability to leverage trust, discretion, and geographic proximity — a model not dissimilar to Singapore’s own occasional role as a neutral venue for sensitive bilateral engagements (most notably the 2015 Ma-Xi summit and the 2018 Trump-Kim summit).
The continued use of Oman as a channel suggests both parties prefer a trusted, discrete intermediary to a multilateral forum. This bilateral-plus-mediator format is more conducive to face-saving concessions than a multilateral negotiating process and may increase the probability of at least a preliminary agreement before the IAEA Board meets on 2 March.
IV. Scenario Analysis: Three Trajectories and Their Implications for Singapore
Scenario A: Partial Agreement (Most Likely Near-Term)
The most probable near-term outcome, given the time pressure from the IAEA Board meeting and both parties’ stated openness to a ‘fast deal’, is a partial or interim agreement. This could take the form of a freeze on Iran’s enrichment levels above a specified threshold, in exchange for limited and reversible sanctions relief — an ‘interim for interim’ structure analogous to the November 2013 Geneva Joint Plan of Action that preceded the JCPOA. For Singapore, this scenario is broadly benign: it would reduce immediate military escalation risk, stabilise oil prices, and preserve the existing sanctions compliance framework without triggering either a sanctions windfall or a new enforcement burden.
Scenario B: Negotiation Breakdown and Limited US/Israeli Strikes
If talks collapse before 2 March, the probability of US or Israeli military action rises substantially given Trump’s stated intentions and the existing military build-up. A limited strike on Iranian nuclear or military facilities — analogous to Israel’s October 2024 strikes on Iranian air defence systems — would likely trigger Iranian retaliation in the Strait of Hormuz or against GCC infrastructure. For Singapore, this scenario would generate acute short-term energy price shock, potential port congestion from shipping rerouting, financial market volatility, and intensified sanctions compliance demands. The MAS would likely need to deploy its foreign exchange intervention mechanisms to manage SGD volatility, and Singapore’s petrochemical sector would face margin compression.
Scenario C: Comprehensive Deal (Lower Probability, High Positive Impact)
A comprehensive agreement modelled on or exceeding the JCPOA’s terms — including robust enrichment limitations, IAEA monitoring, and broad sanctions relief — would be the most favourable outcome for Singapore’s long-term economic interests. Such an agreement would reduce the systemic geopolitical risk premium embedded in regional energy prices, create new trade and investment corridors with Iran (population ~88 million, significant untapped market potential), and strengthen the multilateral non-proliferation architecture that underpins the rules-based international order that Singapore depends on. This scenario is constrained by the structural divergence between Witkoff’s zero-enrichment demand and Iran’s sovereignty position, and is unlikely to be achievable within the current negotiating timeline.
V. Conclusion: A Critical Fortnight for Global Stability
The Geneva talks of 26 February 2026 represent a pivotal moment in the long and fraught history of international efforts to manage Iran’s nuclear programme. The convergence of military pressure, institutional deadlines, and political constraints on both sides creates a narrow but real window for a preliminary agreement. The outcome will reverberate far beyond the immediate bilateral relationship: it will shape oil markets, the credibility of multilateral non-proliferation norms, regional security dynamics across the Gulf, and the economic environment of open, trade-dependent economies such as Singapore.
For Singapore, the stakes are simultaneously economic and normative. As a state whose survival depends on stable international rules, functioning multilateral institutions, and unimpeded access to global trade routes, Singapore has a profound interest in a diplomatic resolution that upholds the NPT framework and avoids the cascading instability of renewed conflict in the Gulf. Singapore’s policymakers, port operators, financial institutions, and energy importers should closely monitor the developments of the next 72 hours with full awareness that the outcome will shape their operating environment for years to come.