Trump is nearing a dramatic decision regarding Iran - the Gulf leaders' summit could be the turning point
US President Donald Trump is expected to meet this Tuesday in New York with leaders or foreign ministers of six Gulf states – Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, and Oman – as part of the UN General Assembly.
According to reports, the meeting will focus on the American strategy for the next stage in the war against Iran and for the 'day after'.
Trump himself said that he hopes the war is nearing its end and that Iran is interested in reaching an agreement.
At the same time, in an interview with Axios, he said he is nearing a 'big decision' regarding whether to resume large-scale attacks against Iran.
The big question – what is really at stake?
The meeting is not currently presented as an official declaration of a ceasefire.
Reports mainly indicate an attempt to formulate a strategy for the post-conflict phase, as the Trump administration is already working on a broader plan to deal with Iran and the regional order after the war.
According to Axios, the full plan is expected to take shape after the US midterm elections in November.
For the Gulf states, this is a critical event.
The war has harmed energy exports, markets, and infrastructure in the region, and a possible shift to less intensive fighting could quickly change the oil price environment and geopolitical risk.
If the meeting leads to real progress toward a cessation of hostilities, markets may react positively – especially if the risk around the Strait of Hormuz decreases.
Oil, inflation, bond yields, and risk sentiment may react almost immediately to any sign of a settlement.
But if Trump chooses instead to re-escalate the campaign, the story completely reverses:
The geopolitical risk premium could return to the market, and oil may get a renewed tailwind.
Currently, this coming Tuesday in New York is becoming one of the most important events in monitoring the future of the war against Iran.
The market already senses a change in direction – now it remains to be seen if Trump will bring an agreement to the table, or another round.