So we have a pause of some sort in the war in Iran as Trump faces the prospect that the fundamental goal of the attacks in the last few weeks have been a failure, in that they have not achieved his stated goal of effecting a fundamental change in the political makeup of Iran. There is a deal in place—a ceasefire deal—but we have no idea how long it will last. But it certainly looks as if the agreement with Iran is basically the same as that achieved by Obama all of those years ago, but at no cost whatsoever. Compared to the current deal that is tentatively in place, achieved after the expenditure of billions and billions of dollars on munitions and an enormous expenditure in terms of the credibility for the United States.
From the perspective of China, the cessation of the hostilities is a good thing in that China desperately needs the free flow of oil and solid supply chains and logistical links for its economy to moving. The war has raised awareness for everybody as to the degree to which we are all still dependent upon fossil fuels including China, even though, for reasons that are related, the country has been working harder than anyone over the past decade to build up its green power capabilities so that it is not so reliant on fossil fuel imports. For sure they will be trying even harder in the days ahead to reduce even further the extent to which they are dependent on external oil.
Meanwhile, it is worth watching the extent to which the renminbi is being used as part of Iran related oil payments, raising again the (still distant) possibility of the US dollar being challenged in terms of international finance. But the fact that the Iranian government, which has been so close to China in recent years, is still in place. is the fundamentally most important fact in terms of global geopolitics to edge this week.
And so we wait. This story is not yet at an end. And in the meantime… have a good weekend!