Trump-Xi talks fail to ease Iran tensions as Hormuz risks keep oil markets on edge

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The U.S. and Iran appeared no closer to reaching a deal to end weeks of conflict and fully reopen the Strait of Hormuz, even after President Donald Trump’s meetings in Beijing with Chinese President Xi Jinping, Bloomberg News reported Sunday, citing Iranian state-linked media reports.

Iranian outlets reported that Washington presented several conditions for a peace agreement, including restrictions tied to Tehran’s nuclear program and limits on sanctions relief. Iranian media characterized the proposals as offering little in return for major concessions, raising concerns that negotiations could stall.

DRONE ATTACK ON UAE

The diplomatic uncertainty comes as a drone strike caused a fire near the UAE’s Barakah nuclear power facility on Sunday, underscoring the risk that the regional conflict could further threaten energy infrastructure. UAE authorities said the fire was limited to an electrical generator outside the plant’s inner perimeter and did not affect nuclear safety.

For investors, the conflict has become increasingly significant because disruptions around the Strait of Hormuz threaten a major artery for global oil and liquefied natural gas shipments. The standoff has already pushed Brent crude prices roughly 50% higher since the war began, fueling inflation concerns and raising the risk of broader market volatility.

SLOWED SHIPPING TRAFFIC

Iranian threats against shipping traffic have slowed energy exports across the Persian Gulf, giving Tehran added leverage in negotiations while increasing pressure on the White House ahead of U.S. midterm elections.

Israeli officials also signaled the conflict could escalate again. Israeli Prime Minister Benjamin Netanyahu planned to speak with Trump following the China trip, while cabinet member Zev Elkin indicated Israel remained prepared to resume military strikes if Washington chose to intensify pressure on Tehran.

Although some vessels have recently been allowed through Hormuz, uncertainty over shipping access continues to rattle energy markets. Trump said he was considering whether to ease sanctions on Chinese companies purchasing Iranian oil, though no decisions have been announced.

Another unresolved issue involves Iran’s stockpile of highly enriched uranium, which reportedly remains unaccounted for following earlier U.S. and Israeli military operations. Israeli officials suggested the material could still be targeted if negotiations collapse.

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