China
The main macro takeaway is that the Iran conflict is no longer just a regional security story; it is becoming a global inflation and growth risk through energy, shipping and policy channels. That matters for China because any sustained disruption in oil flows or transport routes would raise input costs and complicate an already uneven global recovery.
The most immediate pressure point is energy. After Iranian gas facilities in the Gulf were reportedly struck, Tehran said it could target energy installations across Saudi Arabia, the United Arab Emirates and Qatar, helping push oil prices higher and sharpening fears over supply security in the Gulf.
At the same time, Washington is struggling to build a broader coalition response. Europe reportedly rejected US calls to join efforts against Iran and help reopen the Strait of Hormuz, underscoring political limits on coordinated intervention even as the waterway remains central to global energy trade.
US officials are also signaling that the conflict remains dangerous and unresolved. Intelligence chief Tulsi Gabbard said Iran’s government appears intact despite being degraded, and that Tehran and its proxies still retain the capacity to strike US and allied interests in the region, keeping geopolitical risk elevated.
Against that backdrop, the Federal Reserve left interest rates unchanged, despite pressure from President Donald Trump, citing an uncertain outlook as inflation remains stubborn and labour demand weakens. Trump’s temporary suspension of the Jones Act to allow foreign ships between US domestic ports shows the administration is also trying to contain fuel-cost pressures at home as the war adds stress to energy logistics.
A separate decision by Pakistan to pause strikes on Afghanistan ahead of Eid, at the request of Saudi Arabia, Qatar and Turkey, points to a wider regional effort to prevent further destabilisation. For growth, inflation, policy and markets, the message is straightforward: if Gulf tensions persist, higher energy costs and transport uncertainty could squeeze consumers, keep central banks cautious and add another layer of volatility for export-dependent economies including China.