Every Day Is an Adventure When It Comes to the Middle East
Ceasefire — yes, Hormuz deal — no.
Key Takeaways
Fragile Foundations: Some sober second thought has set in over the veracity of this ceasefire — its fragility being exposed from the get-go — as U.S. equity futures have reversed course, but this is really only putting a dent in yesterday’s wild short-covering rally (the UAE’s Defense Ministry calculates that since the onset of this ceasefire, Tehran has launched 17 ballistic missiles and 35 drone attacks).
Truce, Not Transformation: What’s happened is a two-week ceasefire, not a peace deal (as an example, Israel and Hamas have had no fewer than eight ceasefires in the past two decades… now where did that get us?). There are several reasons why the situation remains very fragile.
China’s Strategic Gain: How does China come out as a winner? First, the U.S. now has no friends in the aftermath of this war. China is strategically positioned from this fact alone — America’s increasing isolation from the rest of the world. And a fiscal mess that has become further complicated by the gaping cost of the conflict. China has long shown it is a formidable competitor in the AI race, and with this war, it has also displayed its renewable energy dominance. China dominates renewable energy supply chains — producing the vast majority of the world’s solar panels, wind turbines, batteries, and EVs — and exports of these technologies were already climbing before the war. As the oil crisis pushes countries to accelerate their energy transitions, China is the primary supplier.
