Donald Trump arrives in Beijing on Wednesday for his first state visit to China since 2017, heading into a two-day summit with President Xi Jinping that carries more energy-market weight than any bilateral meeting in recent memory.
The talks, scheduled for Thursday and Friday, come as the world grapples with what the International Energy Agency has called the “largest supply disruption in the history of the global oil market” — the near-total closure of the Strait of Hormuz following U.S. and Israeli strikes on Iran in late February. Brent crude has surged roughly 65% since the conflict began, recently trading above $113 per barrel. The World Bank now projects average Brent prices of $86 per barrel for the full year, with upside scenarios reaching $95 to $115 depending on how quickly shipping flows normalize.
The agenda is sprawlin...Iran, Taiwan, artificial intelligence, nuclear arms and trade. But energy is the thread running through almost every item on it.
The Hormuz Equation
The Strait of Hormuz handles about 20% of global oil trade and a similar share of LNG, and it has been largely blocked since Iran’s Revolutionary Guard began enforcing shipping restrictions after the strikes. Some 20,000 seafarers remain stranded on roughly 2,000 vessels in and around the waterway, according to the International Maritime Organization. At the peak of the disruption, around 13 million barrels per day of crude supply were effectively trapped.
China, which receives around a third of its oil via the strait, has more skin in this game than any other major economy. Beijing cushioned itself ahead of the conflict — the U.S. Energy Information Administration estimates China added 1.1 million barrels per day to its strategic reserves in 2025, building stockpiles to around 360 million barrels by December. That buffer, combined with Beijing hosting Iranian Foreign Minister Abbas Araghchi last week, has positioned China as an unlikely potential intermediary between Washington and Tehran.
Washington is watching closely. U.S. Trade Representative Jamieson Greer confirmed this week that Trump will press Xi directly on China’s continued purchases of Iranian crude. “We don’t want this to be something that derails the broader relationship,” Greer told Bloomberg TV, “but it’s certainly something that may come.” From Washington’s perspective, those purchases are funding the very conflict that shut down the world’s most critical energy chokepoint.
Goldman Sachs analysts say Beijing has increasingly positioned itself as an intermediary on Hormuz, and that the Middle East conflict will feature prominently at the summit. Any joint U.S.-China effort toward reopening the strait could offer near-term relief to oil prices — though most analysts say such an outcome remains a long shot.
The Energy Deal Side
A separate but related energy thread runs through the trade portion of the talks.
At Trump and Xi’s last face-to-face in October 2025 in South Korea, China agreed to begin purchasing American energy, with a potential large-scale Alaska LNG transaction specifically mentioned. Those discussions stalled as the Iran war broke out. Now, with Beijing’s Middle East supply lines disrupted and domestic fuel exports restricted since March, resuming U.S. LNG and crude purchases has returned to the agenda.
U.S. officials say China is expected to announce purchases related to Boeing aircraft, American agriculture and energy at this summit. Plans for a Board of Trade and Board of Investment may also be formally announced, though officials cautioned that both will need further work before becoming operational.
The rare earth minerals truce struck last autumn — the deal that keeps critical minerals flowing to American manufacturers — is also on the table for extension. A U.S. official said the agreement “doesn’t expire yet” and expressed confidence it will eventually be extended, even if not formally announced this week.
For context on what a renewed Chinese commitment to U.S. energy could mean: LNG markets entered 2026 already under political pressure, with the EU’s major U.S. energy purchase deal frozen amid separate trade tensions. China stepping back in as a buyer would reshape the supply picture considerably.
Beyond Energy
The summit agenda covers thornier ground on several other fronts.
On nuclear arms, Washington has long sought bilateral talks with Beijing on arsenal limits. China has privately told the U.S. it has no interest in that conversation right now, according to officials briefing reporters ahead of the visit. Taiwan and semiconductors round out the friction points on the geopolitical side, with China pressing for stability assurances and the U.S. maintaining its long-held positions on both.
The Trump administration has also pressed Beijing on its dealings with Russia, specifically on dual-use goods and revenue flows that Washington says benefit both Tehran and Moscow. “I expect that conversation to continue,” one U.S. official said.
What Markets Are Watching
Analysts at the Brookings Institution and the Peterson Institute have both flagged that expectations for major breakthroughs should be tempered. The more realistic outcome, they say, is that both leaders leave Beijing without triggering a fresh crisis — which, given everything on the table, would itself be a meaningful result.
Matt Gertken, chief strategist at BCA Research, noted that even a successful summit could create complications elsewhere: if China commits to meaningful purchases of U.S. oil and natural gas, that added demand could push global commodity prices higher.
For energy markets, the most consequential question isn’t what gets announced in Beijing — it’s whether this summit produces any real movement on Iran and the Strait of Hormuz. The meeting was originally scheduled for March but was delayed after the U.S. and Israel struck Iran. The context for these talks has been shaped by an energy shock that’s still unfolding.
Trump is scheduled to arrive Wednesday. Talks begin Thursday.
By Charles Kennedy for Oilprice.com
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