If Donald Trump traveled to Beijing hoping to enlist Xi Jinping’s support in bringing the US war against Iran to a successful conclusion, he will return to Washington disappointed. The deadlock in the Persian Gulf remains in place, with the two sides miles apart and neither inclined to make major concessions. Tom Holland looks at what could break the current stalemate. Meanwhile, Tom Miller updates on US moves to approve the use of new Section 301 tariffs, and examines how the US could deploy them.

The United Arab Emirates' decision to pull out of Opec was a surprise, but it did not come out of the blue. The UAE has long complained about the tightness of its Opec production quotas. However, the timing of its announcement suggests the decision was more driven by its hard line against Iran and its frustration with the more conciliatory stance of other Gulf Arab states led by Saudi Arabia. This may have post-war costs for the UAE, writes Tom Holland. Also, Tom Miller examines the position of Pakistan after the UAE called in a US$3.5bn loan to Islamabad, and Yanmei Xie looks at Spain's open-door policy for Chinese inward investment.

A number of clients have asked about the extraordinary backwardation of the oil market, which has seen the price of long-dated futures remain relatively anchored even as prices at the extreme short end of the curve have surged. "Doesn’t this backwardation mean that market participants are confident the Iran war is effectively over?" Unfortunately, the answer is “No, not really.” Tom explains why.