James Thorne, Chief Market Strategist at Wellington Altus, said President Donald Trump‘s administration’s strategy in Iran is being widely misunderstood, describing the conflict as part of a broader effort to position the U.S. for long-term strategic competition with China.
Iran is ‘Not the Prize’
In a post on X, Thorne said many viewed the Iran conflict as lacking a clear strategy or exit plan, but said Iran should not be treated as either a monolith or the main event.
He added that the Trump administration’s objectives are to prevent Iran from obtaining a nuclear weapon, keep the Strait of Hormuz open and weaken the Islamic Revolutionary Guard Corps’ ability to finance terrorism and proxy warfare.
Thorne Says China Is the Real Strategic Focus
According to Thorne, the larger geopolitical contest is between the U.S. and China, with Iran serving as one part of that equation.
He said Beijing has long used Iran as both a discounted source of energy and a way to keep U.S. attention focused on the Middle East.
Reuters reported last month that Iran is expected to receive its first shipment of up to 400 Chinese-made shoulder-fired air-defense missiles, although China’s Foreign Ministry called the report “completely groundless.”
Iran has also pursued Chinese missile systems this year and has reportedly accepted Chinese yuan for some oil payments.
“In my view, the Iranian nuclear threat is effectively off the table for the foreseeable future, the financing of global terror has been materially reduced, and the West has accepted that Pax Americana is over, we are back in a hard great-power game, where hard power is once again the core instrument of policy,” Thorne added.
Oil, Markets and the Strait Of Hormuz
He said that easing tensions with Iran could remove the geopolitical risk premium from oil prices, ease inflation pressures, and bring interest-rate cuts back into focus.
Washington and Tehran continue indirect diplomacy over the Strait of Hormuz, which carries roughly 20 million barrels of oil per day.
Trump recently paused U.S. strikes on Iran to allow negotiations to continue, while the White House has said the international waterway should remain open without tolls or restrictions despite reports that Iran has sought transit fees as part of ongoing talks.
Iran and Oman are working towards a proposed Strait of Hormuz agreement that would establish a new shipping framework with transit tolls.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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