To say the apparent breakthrough in relations between North Korea and South Korea could prove to be of major historical significance is an understatement, but the Middle East remains the geopolitical hot spot more likely to send ripples through global markets in the weeks ahead.

Indeed, expectations that President Donald Trump in May will pull the U.S. out of the international agreement designed to curb Iran’s nuclear program, effectively reimposing sanctions on one of the world’s largest crude exporters helped send oil futures to more-than-three-year highs this month.

On Friday, Secretary of State Mike Pompeo, himself a longtime critic of the Iran agreement, reinforced those expectations, telling reporters in Brussels that “absent a substantial fix…absent overcoming the flaws of the deal—[Trump] is unlikely to stay in that deal past this May.”

French President Emmanuel Macron and German Chancellor Angela Merkel this week separately visited the White House, with both arguing the case for continuing with the Iran deal. Trump has demanded an overhaul of the plan, which is backed by Washington’s NATO allies. Trump faces a May 12 deadline to decide whether to extend sanctions waivers.

The administration has argued the existing deal doesn’t prevent Tehran’s long-term ability to obtain a nuclear weapon and does nothing to contain the country’s influence in the region, a key worry for U.S. allies, including Saudi Arabia and Israel.

While Pompeo may have left the door open a crack, oil-market observers have been downbeat on prospects for renegotiating the pact, in part due to expected Iranian resistance.

The Iranians are “very unlikely to play ball,” wrote Helima Croft, head of commodity strategy at RBC Capital Markets, in a Thursday note. The Iranian leadership has repeatedly ruled out any major concessions and has demanded that Washington live up to its obligations of promised economic relief, she said.

That said, it’s possible that progress in addressing the North Korea situation could create a scenario in which the Trump administration does grant another round of waivers to Tehran, Croft wrote, but it would likely amount to a short reprieve. “We do not see the deal surviving past summer given the constellation of domestic and foreign forces alighted against it,” she said.

Iran’s oil exports recovered from a March dip to stand at 2.5 million barrels a day, Iran Oil Minister Bijan Zanganeh said Monday, according to a Reuters report citing Iranian state television. If the U.S. abandons the agreement, Iran exports could slide as much as 500,000 barrels a day, said Robert Yawger, director of energy futures at Mizuho, in a Friday note.

Oil US:CLM8 UK:LCON8 lost a little ground this week, but remains not far off its April highs. Rising oil prices have helped lift the energy sector, which is playing catch-up with the broader stock market.

Rising crude prices aren’t yet ringing any major economic alarm bells, but drivers will need to prepare for higher prices at the pump as summer driving season approaches.

U.S. stocks, meanwhile, showed little reaction to geopolitical developments. The S&P 500 SPX, -0.27% ended the week virtually unchanged, while the Dow DJIA, -0.00% saw a modest weekly fall.

Investors appeared more focused on rising bond yields and corporate earnings, analysts said. They played down the direct market consequences of developments on the Korean Peninsula, which saw North Korean leader Kim Jong Un and South Korean President Moon Jae-in agree Friday to pursue a peace agreement, while avoiding details on the question of Pyongyang’s nuclear arsenal.

No doubt, resolving tensions on the Korean Peninsula would remove one of the biggest “tail risks” to the global economy and financial markets, wrote economists Gareth Leather and Oliver Jones of Capital Economics, in a Friday note.

But the risk “hardly appeared to be reflected in prices to start with,” they noted, recalling that even at the height of last year’s crisis surrounding North Korea’s nuclear tests that saw Trump threaten “fire and fury,” global equities fell only 2% and then quickly recovered.

Moreover, there’s a long and uncertain road ahead for talks, including a planned meeting between Kim and Trump, with the U.S. demanding that North Korea give up its nuclear weapons.

It is possible the negotiations surrounding North Korea’s nuclear weapons could have implications for U.S.-China trade tensions, though the linkage is unclear, analysts said.

An easing of tensions on the peninsula “could mean that China’s help in containing North Korea would no lober ge effective as a bargaining chip to avoid tariffs,” said analysts at UBS.

Markets, meanwhile, are being driven mostly by economic and earnings fundamentals, rather than politics, they said.

“Genuine progress on reducing political risks—including concerns over a global trade conflict or a collapse of the Iran nuclear deal—would increase investor focus on solid earnings growth,” the UBS analysts wrote, adding that while they hold some countercyclical positions to protect against tail risks, “we remain overweight global and emerging market equities.”