For some weeks, Tehran and Washington have been negotiating an end to the Iran war via Pakistani mediators. Roughly a week ago, a memo was transmitted to Iranian negotiators setting out a path to a settlement. Tehran has now responded to that memo via a reply that ran to several pages and focused on halting hostilities, sanctions relief, compensation, oil sales, and control of the Strait of Hormuz. It did not appear to contain firm commitments to curb Iran’s nuclear programme, which was the core issue Washington wanted addressed before any wider settlement could hold.

American President Donald Trump has described that situation as “unacceptable” and warned that the United States (US) could resume Operation Freedom if Iran does not move.

The apparent stalemate shifts attention to Beijing, where Trump and Chinese President Xi Jinping are expected to meet between Wednesday and Friday.

China sits in the middle of the conflict because it is both exposed to Iranian oil and holds considerable leverage over the regime in Tehran. China has worked quite effectively to circumvent its oil dependency on Hormuz but would much prefer Iranian oil flows to resume to mitigate the risk of its reserves running into trouble. Iran, in turn, is heavily dependent on China. Chinese oil purchases may account for up to 40% of Iranian revenue.

Washington will be hoping Xi uses that leverage to pull Iran towards a deal. But China also has its own strategic interest. A drawn-out crisis that leaves the US under pressure in the Gulf may make Washington look weak and think harder before undertaking future military adventures in the Indo-Pacific. Beijing therefore has the option of leaving the Americans to sweat it out a while longer.

That would put the pressure to end the war firmly back on Trump. For now, the politics has not broken against Trump. Republican polling remains broadly okay ahead of the midterms, with the Senate race still looking as if it will go to the Republican camp. But oil prices have broken upwards again to hold near $105 early on Monday morning, above the $100 level at which global and advanced economy growth forecasts are expected to hold stable. As the consequences track through into the American economy, Trump’s midterm prospects will come under further pressure.

What are America’s options to drop the oil price if Iran does not budge on its demands and China decides to let the Americans sweat?

One is to declare victory, say the Iranian nuclear threat has been substantively set back, show how global energy power balances have swung in favour of America, and then withdraw.

A second is to try to manage traffic through the Strait of Hormuz.

A third is to drive one last bombing campaign aimed at Iranian infrastructure in order to set its economy and its ability to threaten its neighbours back even further.

What is seeming increasingly certain is that the administration in Washington wants something to celebrate out of the war by the time Americans celebrate their independence on 4 July, and, at the same time, to show how cost-of-living increases are coming down. Doing that while remaining actively engaged in the Iranian theatre will be difficult.