Iran War Shadow Looms Over Trump’s China Summit With Xi
CNBC reported Tuesday that President Donald Trump is traveling to China for a summit with President Xi Jinping this week. The Iran war is traveling with him. Analysts now question whether the presidency itself can recover from the conflict’s mounting economic toll.
Iran Casts a Shadow Over Beijing
Trump acknowledged Iran will dominate his conversations with Xi. Speaking to reporters before departing, Trump said talks with the Chinese leader would cover the conflict at length. He insisted Washington does not need outside assistance to resolve the standoff. Yet the war’s consequences have proven far more stubborn than that confidence suggests.
The Strait of Hormuz, the narrow shipping lane connecting the Persian Gulf to global oil markets, remains closed. Iran shut the passage following the U.S. and Israeli military campaign against Tehran. That closure has cut off roughly one-fifth of the world’s crude supply from standard transit routes.
Also Read: What the Strait of Hormuz Closure Means for Global Energy Markets
The Energy Pain Is Already Severe
Amin Nasser, CEO of Saudi Aramco, laid out the stakes bluntly on a Monday earnings call. He warned the market is losing roughly 100 million barrels of oil for every week the strait stays closed. Global oil inventories that countries tapped to offset shortages could reach critically low levels by summer. Even if the strait reopened today, Nasser said, the market would take months to stabilize. A delay of several more weeks would push full normalization into 2027.
Brent crude is currently trading near $104 a barrel, up roughly 44% since fighting began. U.S. average gasoline prices have hit $4.50 per gallon, a 44% jump versus a year ago. Diesel has surged 61%.
A Presidency Under Pressure
Background: The war began on February 27 when the U.S. and Israel launched strikes against Iran. Since then the S&P 500 has actually climbed more than 7%, buoyed by optimism around artificial intelligence and a broader belief that Trump will engineer an exit from the crisis. But analysts at JPMorgan cautioned Monday that markets remain fragile. A large but temporary shock can be absorbed, their note stated. A prolonged disruption cannot.
Trump’s net approval rating has dropped to the lowest point across both of his terms, according to CNBC’s All-America Economic Survey. Rising equity prices have not translated into political goodwill. The JPMorgan team argued the economic pain will eventually force one side to stand down before June. That is a reasonable call. But it also means more weeks of pump-price strain for American consumers before any relief arrives.
The central question heading into Beijing is no longer whether Trump achieves his war aims. It is whether the economic damage done since late February leaves a permanent mark on his presidency.
Read Next: JPMorgan Warns Market Rally Is Fragile Amid Prolonged Macro Risks
