A temporary ceasefire between Iran and the United States has brought cautious optimism to Chinese businesses operating across the Gulf region, but significant uncertainty remains surrounding the durability of the agreement and its impact on trade.
The interim pact, reached in late June 2026, includes a 60-day ceasefire, a waiver permitting Iranian oil exports for the duration, and the reopening of the strategically vital Strait of Hormuz. Both sides have also agreed to pursue a broader framework addressing Iran’s nuclear program and potential sanctions relief. Prior to the ceasefire, Iran’s blockade of the strait had severely disrupted global shipping lanes, particularly affecting commercial vessels transporting energy products and driving up freight costs.
Despite the diplomatic breakthrough, Chinese traders say that many firms remain reluctant to resume long-term trade commitments. Abbas Shi, a Chinese businessman facilitating Sino-Iranian commercial connections since 2024, emphasized that the immediate priority is resolving a substantial backlog of shipments rather than initiating new contracts. “The first thing everyone wants is to get all the cargo that’s been sitting at sea or waiting to be shipped moving again,” Shi said.
Shipping through the Strait of Hormuz, however, has not fully resumed, forcing companies to rely heavily on rail freight. This alternative has proven insufficient, with rail capacity nearly maxed out through July and freight rates surging to almost US$9,000 per container. Shi noted that sea transport remains preferable due to its lower costs, especially as post-conflict reconstruction in Iran is expected to drive significant demand for materials. Yet the persistent logistical bottlenecks pose a major challenge.
Skepticism also persists regarding the ceasefire’s longevity. “Most businesspeople here don’t really believe these terms will be accepted,” Shi remarked, referencing concerns over enforcement and the potential for renewed hostilities. He estimated that about 80% of Iran’s consumer economy has been disrupted by the conflict, with widespread business closures and layoffs outside essential sectors like agriculture.
Other exporters have scaled back their Iranian operations. Kevin Zhao, an appliance exporter based in Yiwu, Zhejiang province, reported shifting focus away from Iran toward markets in the Caucasus and Central Asia. Zhao cited diminished consumer spending in Iran and unresolved peace uncertainties as key reasons for his retreat.
The shipping industry also remains cautious. Ken Chung, chairman of the Chamber of Hong Kong Logistics Industry, noted that despite a willingness to negotiate, significant obstacles remain. “Israel still appears to be carrying out sporadic attacks,” Chung said, highlighting that ongoing military actions could undermine prospects for a lasting settlement.
While the agreement marks a potential turning point, Chinese traders and logistics providers alike are adopting a wait-and-see stance as geopolitical tensions and logistical complexities continue to hinder a full restoration of Gulf trade flows.