Investors Underestimating China's Leverage On Iran-Hormuz Crisis
Iran's top diplomat visiting Beijing on Wednesday as Donald Trump prepares for his meeting with Xi Jinping underscores how central China is becoming to any diplomatic outcome involving the Strait of Hormuz.
This analysis from Nigel Green, CEO of global financial advisory giant deVere GroupFinancial markets reacted immediately to signs tensions could cool. Brent crude fell more than 3% toward $107 a barrel after briefly surging above $126 during the latest escalation. The Stoxx Europe 600 and Germany's DAX both rose around 1%, while bond yields eased as lower oil prices reduced immediate inflation pressure.
The Strait of Hormuz handles roughly 20% of global seaborne oil flows and a large share of LNG exports.
Around 84% of crude shipments moving through the route are destined for Asia, with China remaining the world's largest crude importer and one of the biggest buyers of Iranian oil despite years of US sanctions pressure.
Nigel Green says investors are still focused heavily on earnings momentum and AI-driven equity gains while underestimating the longer-term implications of Beijing's growing influence over energy diplomacy and trade routes.
China brokered the restoration of diplomatic ties between Saudi Arabia and Iran in 2023 and has steadily expanded its influence across the Gulf through trade agreements, infrastructure investment, and long-term energy partnerships.
Nigel Green says Beijing's role is strengthening because every major economy remains dependent on stable Gulf energy flows.
He says the developments are likely to drive stronger investor interest toward sectors linked to energy security, strategic infrastructure, commodities, defense, and cybersecurity.
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