China's growing influence in Iran-Hormuz crisis reshapes global investment landscape

By Newsdesk

May 07 2026
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In a significant diplomatic manoeuvre, Iran's top diplomat visited Beijing on Wednesday, highlighting China's emerging role as a pivotal player in the ongoing crisis in the Strait of Hormuz. The visit coincided with preparations for a meeting between former US President Donald Trump and Chinese President Xi Jinping, underscoring China's centrality to any diplomatic resolution involving the strategic waterway.

China's growing influence in Iran-Hormuz crisis reshapes global investment landscape

This development was analysed by Nigel Green, CEO of the global financial advisory firm deVere Group, following a meeting between Iranian Foreign Minister Abbas Araghchi and Chinese Foreign Minister Wang Yi in Beijing. The meeting came amidst heightened tensions between the US and Iran, which had prompted Trump to suspend "Project Freedom," a US naval operation designed to escort commercial vessels through the Strait of Hormuz.

Financial markets responded swiftly to indications that tensions might de-escalate. Brent crude prices fell more than 3%, settling towards $107 a barrel after briefly surpassing $126 during the latest escalation. Meanwhile, European markets showed signs of recovery, with the Stoxx Europe 600 and Germany's DAX both rising around 1%, and bond yields easing as lower oil prices alleviated immediate inflation concerns.

Nigel Green remarked, "China’s quiet emergence as the power broker in the Strait of Hormuz crisis could become one of the most important investment stories of the year." He elaborated on China's strategic positioning, noting, "While markets focused on Donald Trump’s reversal over military escorts in the Gulf, Beijing was meeting directly with Iran and positioning itself at the centre of diplomacy tied to global energy flows."

The Strait of Hormuz is a critical chokepoint, handling approximately 20% of global seaborne oil flows and a substantial portion of LNG exports. Notably, around 84% of crude shipments passing through this route are destined for Asia, with China being the largest importer of crude oil globally and a significant buyer of Iranian oil despite longstanding US sanctions.

Green observed that investors remain heavily focused on earnings momentum and AI-driven equity gains, potentially overlooking the broader implications of China's expanding influence over energy diplomacy and trade routes. "Strong corporate earnings, especially across AI and large-cap tech, continue supporting equity markets near record highs," he stated. "But underneath the headline indices, capital is, quite sensibly, moving more carefully. Investors are paying much closer attention to freight exposure, energy sensitivity, supply-chain resilience, and pricing power."

China's role in the region has been steadily growing. In 2023, China brokered the restoration of diplomatic ties between Saudi Arabia and Iran, further expanding its influence across the Gulf through trade agreements, infrastructure investment, and long-term energy partnerships. According to Green, Beijing's role is strengthening due to the global dependency on stable Gulf energy flows. "Washington increasingly, it seems, needs China engaged if it wants diplomatic stability around Hormuz," he said. "This represents a major change in geopolitical influence because Beijing now holds economic and political leverage with Tehran that Western governments do not."

The developments in the Strait of Hormuz are likely to drive increased investor interest in sectors linked to energy security, strategic infrastructure, commodities, defence, and cybersecurity. "Investors looking only at daily oil-price swings are missing the deeper market story," Green pointed out. "This is becoming a battle for influence over energy routes, shipping flows, and commodity stability at the centre of the global economy."

He further emphasised the long-term implications of China's growing leverage, stating, "Markets rallied because oil prices pulled back sharply after Trump put the naval escort operation on hold. Longer term, investors should focus on how much geopolitical and economic leverage China is building by becoming increasingly difficult to bypass during global energy crises. I believe it will, moving forward, become an increasingly essential market factor."

As the geopolitical landscape continues to evolve, it is clear that China's strategic manoeuvres in the Strait of Hormuz are reshaping global investment dynamics, with far-reaching implications for energy security and economic stability.

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