The upcoming summit between U.S. President Trump and Chinese President Xi has one issue at its core: resolving the crisis at the Strait of Hormuz.
This situation began when the U.S.-Israel war against Iran led to the effective closure of this critical waterway. The Strait of Hormuz is a chokepoint for about 20% of the world's seaborne oil, so its shutdown immediately sent shockwaves through energy markets. As a result, Brent crude oil prices have surged by over 43% since the war began, climbing from around $72 to over $103 per barrel. This price spike is now a major driver of global inflation.
The path to this diplomatic flashpoint unfolded in clear steps. First, the conflict began in late February 2026, prompting shippers to halt traffic through the strait. Second, Iran’s Islamic Revolutionary Guard Corps (IRGC) formalized the closure in early March, cutting off supply. Third, U.S. military actions throughout March and April, including an aerial campaign and a naval blockade, failed to reopen the passage. This military stalemate has made a diplomatic solution essential.
This is where China enters the picture. Beijing is a crucial economic partner for Tehran and one of the largest buyers of Iranian oil, giving it significant influence. Recognizing this, the White House has openly called on China to mediate. This makes the Beijing summit the primary venue for de-escalation, turning a bilateral meeting into a negotiation with global consequences.
Ultimately, the stakes couldn't be higher. The summit's outcome will directly impact global energy security and economic stability. A successful agreement could see oil prices fall back toward a more manageable $80–$90 range. However, a failure could send prices soaring above $120, potentially triggering a wider economic downturn. The world is watching to see if diplomacy can reopen this vital artery of global trade.
- Glossary
- Strait of Hormuz: A narrow waterway between the Persian Gulf and the Gulf of Oman. It is one of the world's most important oil transit chokepoints.
- Brent Crude: A major benchmark price for purchases of oil worldwide. It is sourced from the North Sea.
- Islamic Revolutionary Guard Corps (IRGC): A branch of the Iranian Armed Forces, founded after the Iranian Revolution. It is intended to protect the country's Islamic Republic system.