Xingzheng Strategy analyst Zhang Qiyao suggests that conditions are now favorable for negotiations between the United States and Iran, with a significant agreement potentially being reached as early as April. The analyst notes that while the market has been skeptical, recent developments indicate that both sides may be moving toward a resolution.
Past reversal signals were highlighted previously. In late February and early March, as tensions initially escalated, opportunities related to Trump's TACO strategy were identified. When Trump stated in early March that the conflict was "almost over," market panic reversed sharply, and warnings were issued about the risks of over-interpreting the TACO trade, after which oil prices recovered from $80 to $100 per barrel. By mid-March, as oil prices entered a high-volatility range, it was noted that negotiations would likely only occur under high oil price conditions, presenting a new TACO trade as a potential market discrepancy to track. On March 24, when Trump signaled a second round of TACO strategy by announcing that the US was negotiating with Iran, it was suggested that the crude market might again be overreacting, and that a drop in oil prices could encourage Trump to maintain maximum pressure, though a mid-term de-escalation remained possible. On April 10, following the start of talks, five predictions for the US-Iran situation were outlined, indicating short-term volatility but a likely negotiated outcome. Recent weekend setbacks in talks have further validated this analytical framework.
Currently, as market skepticism gives way to rising optimism, the focus shifts from predicting reversals to a more positive outlook for both the short and medium term. Negotiations now appear feasible: maximum pressure is seen largely as a bluff, highlighting a genuine desire for talks. Trump's strategy of using pressure to spur dialogue suggests underlying momentum, with a major deal possible in April.
A significant agreement is anticipated in April, maintaining the view that negotiations will lead to a resolution.
The US faces a hard constraint to shorten the timeline for reopening the Strait of Hormuz. On March 30, Trump took a firm stance, demanding the strait be opened "immediately" and threatening severe consequences, including targeting Iranian infrastructure, if a deal was not reached shortly.
So far, the conflict has not escalated into a ground war. For Trump, the cost of de-escalation is lower than further escalation. With unclear strategic goals and limited effective tactical options, expanding the conflict offers little incentive. The US could advance talks by conceding on certain secondary demands, such as those related to Iranian support for regional groups or missile programs, which are more aligned with Israeli interests, thereby proactively moving negotiations forward.
Markets are gradually pricing in the possibility of an April easing. After the TACO index peaked in late March, it fell sharply following Trump's national address on April 1 and the announcement of a ceasefire on April 7, nearing pre-conflict levels. Despite this decline, Trump's April 14 interview signals that the war is "over" or "very close to over," marking a decoupling from the TACO index and suggesting substantive de-escalation is underway.
The negotiation pace is expected to start slow but accelerate as deadlines approach. Key dates include the April 22 ceasefire deadline and the April 28 congressional authorization date. Two core demands provide a floor for talks: Iran's call for full sanctions relief on energy and finance, and the US insistence on secure Strait of Hormuz passage. The US has shown openness to lifting sanctions as part of a future agreement, not treating it as a non-negotiable point. Establishing a toll system for the strait, instead of reparations, could satisfy US transit concerns without conflict. Trump's primary interest is preventing oil price spikes from affecting global markets, not legal sovereignty over the strait, allowing for a toll arrangement if passage remains unimpeded.
Subjectively, both Iran and the US appear to value this negotiation window, which is relatively short, increasing the likelihood of success. Iran is unlikely to overplay its hand given its current advantageous position. Its high-level delegation indicates a serious effort to secure a favorable comprehensive agreement, leveraging its status as both a victim and a successful defender. Iran's urgent need for sanctions relief to address economic hardship makes a deal on this issue highly probable, aligning with US interests and facilitating progress. Time pressure is also on the US side. Facing declining approval ratings, Trump may push for a successful negotiation to bolster his narrative of achieving victory through diplomacy. Moreover, with US markets reliant on global semiconductor supply chains, disruptions to LNG or helium imports—critical for companies like TSMC—could risk production halts and damage the high-valuation narrative of US equities.
Regarding oil prices, the current US-Iran conflict is comparable in duration to the 1990 Gulf War, which ended swiftly. In the short term, oil prices may remain volatile but trend weaker due to strait disruptions and slow production recovery from damaged facilities. Long-term, multiple factors—including renewable energy adoption, peak energy demand in China, the reintegration of Russian, Iranian, and Venezuelan oil into global markets, and increased unconventional oil and gas production—suggest a looser global crude supply-demand balance.
Risks include prolonged conflict, Iranian intransigence, or US inability to accept terms leading to谈判破裂.
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