U.S. final offer is key in Iran nuclear talks, says RBC's Helima Croft

Geopolitical Risk & Oil Prices - Rising tensions in the Middle East, particularly concerns about a potential Israeli strike on Iran, have pushed oil prices to a two-month high [1] - The US is considering a partial or complete evacuation of embassies in Baghdad, Kuwait, and Bahrain, raising concerns about potential military action [3][4] - The UK Navy has warned of potential military action around key waterways, adding to the unrest in the Middle East [4] - The Iranian nuclear talks are at a critical juncture, with a potential "make or break" point on Sunday, hinging on the issue of uranium enrichment [4][5] - Israel views Iran's enrichment capabilities as intolerable, potentially leading to preemptive action [7][8] Supply & Demand Dynamics - While supply and demand are currently balanced, a strike on Carg Island, which handles 90% of Iranian oil exports, could significantly increase oil prices, potentially reducing supply by over 1 million barrels per day [11][12] - Iraqi militias located in southern Iraq near key oil infrastructure in Basra pose a risk to oil supply [13] - OPEC spare capacity could be utilized if attacks intensify [13] US-Israel Relations & Iran - There may be a difference of opinion between the US and Israel regarding acceptable levels of uranium enrichment, with Israel favoring zero enrichment [9][10] - The US's final offer on uranium enrichment terms will be crucial in determining whether Israel might act independently [10] - If nuclear talks break down, the probability of an Israeli strike increases [11]