Geopolitics2026-04-11★★★★★

US-Iran peace negotiations begin amidst Trump's hawkish remarks, Middle East geopolitical risk persists

The United States and Iran began peace negotiations in Islamabad, Pakistan, on the 11th (local time). However, U.S. President Donald Trump warned of high-intensity military action if negotiations fail, increasing uncertainty regarding the outlook for the negotiations. As a result, investors' inflation concerns and risk aversion are escalating, and upward pressure on international oil and food prices is expected to persist.

What Happened

Today (April 11, 2026), delegations from the U.S. and Iran began their first peace talks in Islamabad, Pakistan. This follows a two-week ceasefire agreement and has generated some optimism for de-escalation in the Middle East. However, just before the talks commenced, former U.S. President Donald Trump warned that if the negotiations fail to reach an agreement, high-intensity military action, including the 'use of weapons,' could be pursued, once again increasing uncertainty surrounding the talks' prospects. The Iranian delegation arrived in Pakistan ahead of the talks, and the market is closely watching these negotiations as 'make-or-break talks'.

Why It Matters

These U.S.-Iran peace talks represent a critical turning point that will determine geopolitical risks in the Middle East. Iran is one of the world's major oil producers, and the Strait of Hormuz is a strategic chokepoint accounting for approximately 20% of global seaborne oil shipments. Former President Trump's hawkish remarks suggest the possibility of military conflict if talks collapse, which could lead to a surge in international oil prices and disruption of global supply chains. The market has already expressed concerns about the economic impact of an Iranian conflict, particularly the potential for rising food prices. Risks originating from the Middle East will exacerbate global inflationary pressures, which could influence the monetary policy direction of central banks worldwide, thus acting as a major variable for the global economy. Historically, instability in the Middle East has consistently driven up international oil and gold prices, and this time is not expected to be an exception.

Impact on the Korean Market

The Korean market could be significantly impacted by the outcome of the U.S.-Iran negotiations. If the talks collapse and military tensions escalate, international oil prices (WTI, Brent crude) will surge, increasing cost burdens for domestic refiners and petrochemical companies. Furthermore, rising logistics costs, coupled with intensifying overall inflationary pressures, could diminish expectations for interest rate cuts by the Bank of Korea. Conversely, if the negotiations are successfully concluded and tensions ease, oil prices could stabilize, and risk appetite could recover, positively impacting the stock market. However, currently, uncertainty prevails, exacerbated by Trump's remarks. Rising food prices will directly impact domestic consumer prices, increasing household burdens and adding difficulties to the government's inflation management efforts.

Key Stock Analysis

S-Oil (010950): International oil price increases can positively impact refiners' refining margins, but rising crude oil import costs could lead to inventory valuation losses and increased working capital burden. Short-term volatility is expected. (sentiment: neutral)
SK Innovation (096770): Similar to S-Oil, highly sensitive to oil price fluctuations. The petrochemical business segment could face increased cost burdens, which is negative. (sentiment: negative)
Lotte Chemical (011170): Rising raw material prices like naphtha directly impact the profitability of petrochemical companies. With the industry already facing a downturn, additional cost burdens could lead to further deterioration in performance. (sentiment: negative)
Korean Air (003490): Rising oil prices lead to higher jet fuel prices, increasing airlines' operating expenses. This could result in a deterioration in profitability. (sentiment: negative)
WTI Crude (WTI): Escalating geopolitical tensions in the Middle East are the strongest factor driving up oil prices due to increased supply disruption concerns. A sharp rise is highly probable if talks collapse. (sentiment: positive)
Brent Crude (BRENT): Similar to WTI, it reacts directly to Middle East risks and will face upward pressure as an international oil benchmark. (sentiment: positive)
Gold (GOLD): Increased geopolitical instability and inflation concerns can strengthen safe-haven demand, leading to a rise in gold prices. (sentiment: positive)
U.S. 10-Year Treasury (US10Y): Rising inflationary pressures could delay the U.S. Federal Reserve's timing of interest rate cuts or increase the likelihood of rate hikes, pushing up bond yields. (sentiment: negative)

Future Scenarios

The outcome of these negotiations is extremely important. The optimistic scenario is one where the U.S. and Iran reach a dramatic agreement, leading to an easing of Middle East tensions and stabilization of international oil prices. In this case, global economic uncertainty would dissipate, and risk appetite could recover. However, the pessimistic scenario involves the collapse of talks, followed by military action as warned by Trump, or Iran pursuing hardline measures such as blockading the Strait of Hormuz. This would lead to a surge in international oil prices, deepening global inflation, and overall financial market instability. Investors should closely monitor the progress of the talks, any further statements from Trump, and trends in international oil and gold prices. In particular, the market's direction next week is expected to be heavily influenced by the outcome of the negotiations scheduled to conclude by this weekend.

Impact analysis

S-Oil

⚖️Watch

Rising oil prices can be positive for refining margins, but rapid volatility creates inventory valuation and working capital burdens. Prolonged Middle East risks will increase uncertainty.

SK Innovation

📉Headwind

The refining segment is sensitive to oil price fluctuations, and the petrochemical segment may face profitability deterioration pressure due to rising raw material prices. Overall, this is negative for the business environment.

Lotte Chemical

📉Headwind

Rising raw material prices, such as naphtha, directly increase cost burdens for petrochemical companies, pressuring margins. As the industry is already experiencing a downturn, further negative impacts on performance are expected.

Korean Air

📉Headwind

Rising oil prices increase jet fuel purchase costs, raising airlines' operating expenses and hindering profitability. Given its significant international flight operations, the impact could be substantial.

CommodityWTI Crude Oil

📈Beneficiary

Escalating geopolitical tensions in the Middle East will heighten concerns about crude oil supply disruptions, driving up WTI prices. A failure in negotiations would likely lead to a sharp price surge.

CommodityBrent Crude Oil

📈Beneficiary

Brent Crude Oil, a global benchmark, also reacts directly to Middle East risks, and will face upward price pressure if supply instability deepens.

CommodityGold

📈Beneficiary

Increased geopolitical instability and inflation concerns can strengthen safe-haven demand, leading to a rise in gold prices. It becomes an attractive investment during periods of heightened uncertainty.

BondUS 10Y Treasury

📉Headwind

Increased inflationary pressure due to Middle East risks could delay the Fed's interest rate cut timeline or increase the likelihood of further hikes, thereby pushing up Treasury yields.