China and Pakistan presented on Tuesday a new initiative for ending the war in Iran that includes an immediate ceasefire and the reopening of the Strait of Hormuz, Axios reports
- Asked whether he supports the new initiative, President Trump declined to comment on the specifics but told Axios the diplomacy with Iran was going well.
- It's unclear if Trump has given his blessing behind the scenes, but a source said China had been helpful in the efforts to reach a deal.
- It's unlikely that the Pakistanis would launch such an initiative with China if the US opposed it.
Context
The proposed initiative by China and Pakistan to end the war in Iran signals a potential thaw in regional tensions, with implications for the energy market, particularly regarding the Strait of Hormuz. While the U.S. administration's stance remains ambiguous, the involvement of China suggests a strategic pivot and a possible shift in geopolitical alignments that could impact currencies, equities, and commodities, especially oil.
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