President Donald Trump is preparing to hold talks with Chinese leader Xi Jinping focused on energy policy and the escalating conflict with Iran, as disruptions to oil supply continue to shake global markets. The discussions could reshape international energy dynamics and test the economic stability of major economies already strained by geopolitical tensions.
Oil market jitters
Crude prices have swung wildly in recent weeks after attacks on key infrastructure in the Persian Gulf and retaliatory strikes by Iran-backed forces. The White House did not confirm a specific date for the Trump-Xi meeting but described it as part of broader efforts to stabilize energy flows. A senior administration official told reporters that the talks would cover “mutual interests in preventing further supply shocks.”
China imports roughly 12 million barrels of oil per day, making it the world’s largest buyer. Any disruption to shipping lanes or refinery operations in the Middle East hits Beijing as hard as Washington. The planned conversation signals that both leaders see a need to coordinate rather than escalate.
Why the timing matters
The outreach comes days after Iran test-fired a new missile capable of reaching Israeli and Saudi targets. Trump has threatened to reimpose sanctions on countries that continue buying Iranian crude, a policy that directly collides with China’s energy needs. In 2023, China imported about 1.5 million barrels per day from Iran, much of it shipped through intermediaries to skirt U.S. restrictions.
Xi has so far avoided direct public comment on the Iran situation, but Chinese state media have run editorials warning that a broader war would devastate Asian supply chains. Trump’s proposal to talk gives both leaders a way to test compromise without committing to public positions.
What's at stake for global markets
Stock indexes in Tokyo, London, and New York have all dropped this week as insurance premiums for tanker transit through the Strait of Hormuz spiked. If Trump and Xi can agree on a joint framework — perhaps a temporary exemption for Chinese imports of Iranian oil in exchange for Beijing pressuring Tehran to de-escalate — the market could see relief. But if the talks break down, analysts at major banks expect oil to hit $120 a barrel within weeks.
No specific date has been set for the meeting, which is expected to happen by video conference rather than in person. Both leaders have packed schedules through the end of the month, so aides are working to find a window that works for both.
The question now is whether Trump can offer Xi enough economic incentive to step into a mediation role — and whether Xi is willing to use his leverage over Iran without alienating a key oil supplier.
