DUBAI, United Arab Emirates — Talks between U.S. President Donald Trump’s administration and Iran’s government on a potential renewed nuclear agreement began on a positive note over the weekend, representatives of both countries said, despite enduring sticking points and a lack of clarity on the specific conditions held by each side.

Notably, there was more optimism toward a deal and overall communication between the longtime adversaries. Delegates from the U.S. and Iran agreed to hold more talks next week in Rome, while Iran’s Foreign Affairs Ministry described the negotiations of Saturday as having taken place in a “constructive atmosphere and based on mutual respect.”

This highlights the gaping difference between the Biden administration’s attempts to revive the 2015 nuclear deal and the position that the Trump administration finds itself in today: one with dramatically changed advantages for Washington and a much weaker and more vulnerable Iran.

“The Iranians are, I think, a little bit more desperate than they were in 2022, and they are faced with a very weak economy,” Gregory Brew, senior analyst on Iran and energy at political risk consultancy Eurasia Group, told CNBC.

“Iran’s regional position has been significantly weakened. They’re concerned about how much more stress that they can handle — their internal position, the situation of internal discontent is likely only to get worse. So they do have an interest in obtaining a deal sooner rather than later, and Trump is giving them — or potentially giving them — an opportunity to obtain such a deal.”

Biden was also constrained by public opinion, Brew noted, risking criticism of appearing “soft” on Iran. Trump doesn’t face those same limitations, he said — the president is already seen as an Iran hawk and re-implemented “maximum pressure” sanctions on the country soon after entering office.

Iran’s economy has deteriorated dramatically in the years since Trump in 2018 withdrew the U.S. from the multicountry deal, formally titled the Joint Comprehensive Plan of Action, or the JCPOA. The agreement was brokered in 2015 along with Russia, China, the EU and U.K. under the Obama administration to curb and stringently monitor Iran’s nuclear activity in exchange for sanctions relief.  

Already facing several years of protests, significantly weakened currency, and a cost-of-living crisis for Iranians, the Islamic Republic was hit with the hammer blow of losing its main ally in the Middle East last year, when the Assad regime collapsed in Syria. Tehran’s arch-enemy Israel meanwhile killed most of the senior leadership of Hezbollah, Iran’s proxy in Lebanon.

Iranian supreme leader Ayatollah Ali Khamenei was formerly staunchly opposed to negotiations with the U.S., but senior Iranian government officials reportedly launched a coordinated effort to change his mind, framing the decision as critical to the regime’s survival.

Trump has made is abundantly clear that he will not accept a nuclear-armed Iran. Recent years have raised the stakes: in the time since Trump withdrew from the JCPOA, Iran has been enriching and stockpiling uranium at its highest levels ever, prompting the International Atomic Energy Agency, the United Nations’ nuclear watchdog, to issue numerous warnings. 

“Iran remains the only non-nuclear weapon state enriching uranium to this level, raising significant concerns over potential weapons development,” a U.N. news release from March 3 read.

Tehran insists that its program is for civilian energy purposes only, but Iran’s nuclear enrichment has reached 60% purity, according to the IAEA — dramatically higher than the enrichment limit posited in the 2015 nuclear deal, and a short technical step from the weapons-grade purity level of 90%.

Trump has repeatedly warned of a U.S. military response if Iran doesn’t change course to Washington’s satisfaction.

“I would like a deal done with Iran on non-nuclear. I would prefer that to bombing the hell out of it,” the American president said in early February in an interview with the New York Post.

That pressure has clearly had an impact on Tehran’s willingness to come to the table, says Ryan Bohl, a senior Middle East and North African analyst at the RANE Network.

“I think the Iranians are eager to develop a workable framework that will allow extended negotiations that would forestall military action that President Trump certainly has suggested could come in just a few months,” Bohl said.

“Moreover,” he added, “the Iranian economy could use any suggestion of relief to improve conditions on the ground, which would in turn improve public support for the Islamic Republic.”

Still, the specific parameters of a potential deal have not yet been discussed, and further talks will reveal the extent of the differences between each country’s position.

Chief among the remaining sticking points is the fact that Iran is unwilling to give up its nuclear program — that’s a red line for Tehran, its leaders have said. But exactly what kind of program that is may actually be something the Trump administration is willing to show flexibility on, as long as Iran can’t actually develop a bomb.

Subsequent talks will need to reveal Trump’s conditions, which have so far been kept under wraps.

“Ultimately, I think the key to these negotiations was always going to be around what the U.S. demands were towards Iran,” Nader Itayim, Mideast Gulf Editor at Argus Media, told CNBC’s “Access Middle East” on Monday.

“Is the U.S. looking to completely dismantle the Iranian nuclear program, or is it purely a matter of just ensuring verification to make sure there is no weaponization of this program?”

“I think Donald Trump has been very clear over the last two, three weeks in particular: no weaponization. Weaponization is that red line,” Itayim said. “The Iranians can work with that — they’ve always claimed and said that we are not after nuclear weapons. So this was a good starting point.”

Deep distrust remains between the two sides, and Iran hawks — in particular, U.S. ally Israel — are displeased that the negotiations are taking place and oppose any potential flexibility by the Trump administration.

On Wednesday, a few days before the U.S.-Iran talks in Oman, Trump said that Israel would be the “leader” of any potential military strike against Iran, if its government does not give up its nuclear weapons program.

Just as many mission-driven fund managers have reconsidered their defense policy in the wake of Russia’s full-scale invasion of Ukraine, an analyst at Goldman Sachs says it is now time for sustainable investors to re-evaluate their approach to oil and gas companies.

It comes at a time when European energy majors have slashed renewable spending and doubled down on fossil fuels in an effort to boost near-term shareholder returns.

Investments focused on environmental, social and governance (ESG) factors tend to favor companies that score highly on certain criteria, such as climate change, human rights or corporate transparency.

Tobacco giants, fossil fuel companies and weapons makers have typically been among those to have been screened out or excluded from sustainable portfolios.

“In the same way that the sentiment on defense companies has changed with the Russia-Ukraine war, I think the sentiment on ownership of oil and gas should change,” Michele Della Vigna, head of EMEA natural resources research at Goldman Sachs, told CNBC by video call.

A persistent unwillingness to own energy majors is biased by a “major mistake” in evaluating the energy transition from the perspective of European investors, Della Vigna said — an approach that he expects to change.

Goldman’s Della Vigna outlined three reasons to back-up his view on why ESG investors should bring oil and gas stocks in from the cold.

“Let’s be clear, this energy transition will be much longer than expected. We are going to have, we think, peak oil demand in the mid-2030s [and] peak gas demand in the 2050s,” Della Vigna said.

“And we clearly show that we need greenfield oil and gas development well into the 2040s. So, if we need new oil and gas development, why wouldn’t we own these companies?”

The International Energy Agency, meanwhile, has said it expects fossil fuel demand to peak by the end of the decade. The energy watchdog has also repeatedly warned that no new oil and gas projects are needed to meet global energy demand while achieving net-zero emissions by 2050.

Della Vigna’s second point was that oil and gas companies represent some of the biggest investors in low-carbon energy worldwide, adding that a failure to both engage with, and finance oil and gas stocks would ultimately serve as a barrier to the energy transition.

In addition, Della Vigna said that unlike utilities, which he described as infrastructure builders, oil and gas companies are “market makers” and “risk-takers.”

“So, we need their capabilities, the balance sheet and the risk-taking. They are some of the largest investors in low carbon and whether we like it or not, we also need their core businesses of oil and gas,” Della Vigna said.

“Otherwise, we will not have affordable energy, especially for emerging markets, and we will have energy poverty, which I don’t think is acceptable in any ESG framework,” he continued.

“I think the energy companies that lead the energy transition should be a cornerstone of ESG funds — not a divestment target,” Della Vigna said.

“We can see the negative impacts of oil and gas. The current climate situation is not good. We see record-breaking temperatures, rising greenhouse gas emissions, oceans warming and sea level rise. I mean, why would we want to see more fossil fuels? Most ESG investors would not,” she added.

Scientists have repeatedly pushed for rapid reductions in greenhouse gas emissions to stop global average temperatures rising. These calls have continued through an alarming run of temperature records, with the planet registering its hottest year in human history in 2024.

Extreme temperatures are fueled by the climate crisis, the chief driver of which is the burning of fossil fuels.

Allen Good, a senior stock analyst covering the oil and gas industries at Morningstar, said it’s difficult to foresee a time where there will be a total acceptance of oil and gas in ESG.

He added, however, that a slightly more relaxed approach from investors is feasible on the basis that energy majors significantly increase the amount they invest in renewable and low-carbon technologies.

“I mean ESG, to me, it’s whole raison d’être is the energy transition [and] climate change. So, I would find it hard to believe that they would say they are going to start investing in oil and gas companies,” Good told CNBC by telephone.

“Now, I think what you could start to see is some loosening around the edges, whereby they come to some agreement where a company is investing X amount in renewable energy, or their earnings will be X amount in 10 years, then maybe a Total[Energies] gets into the portfolio. But someone like an Exxon or even a Chevron … I would find that hard to see how that gets in ESG,” he added.