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THE IRAN-HORMUZ AFFAIR AND CHINA'S GROWING DIPLOMATIC LEVERAGE

As markets rally and crude prices tumble on rising optimism that a resolution to the U.S.-Israeli war on Iran may be near, China has stepped in to assume a major role in negotiations.

This development has caught the eye of Nigel Green, CEO of deVere Group, who notes that Iranian foreign minister Abbas Araghchi met his Chinese counterpart Wang Yi in Beijing following a sharp escalation between the U.S. and Iran that posed a real threat to their fragile truce.

"China’s quiet emergence as the power broker in the Strait of Hormuz crisis could become one of the most important investment stories of the year," Green writes, adding, "While markets focused on Donald Trump’s reversal over military escorts in the Gulf, Beijing was meeting directly with Iran and positioning itself at the centre of diplomacy tied to global energy flows."

Green notes the timing of Araghchi's visit, which he says illustrates "a geopolitical realignment taking place in real time."

China has skin in the game. About 84% of crude shipments through the Strait of Hormuz are headed to Asia, and China is among the world's largest importers of Iranian oil.

"Investors looking only at daily oil-price swings are missing the deeper market story," the deVere CEO says. "This is becoming a battle for influence over energy routes, shipping flows and commodity stability at the centre of the global economy."

While earnings and AI fervor continue to push U.S. stock indexes to record highs, Green suggests investors would do well to focus on China's increasing geopolitical and economic influence, demonstrated by the growing reality China has a place at the table in solving any future global energy crises.

"I believe it will, moving forward, become an increasingly essential market factor,” Green writes.

(Stephen Culp)

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