The potential framework agreement between the United States and Iran is capturing the attention of global capital markets.

"Talks with Iran are progressing well!" U.S. President Donald Trump posted on social media on the 25th, describing the state of negotiations. He added that if an agreement cannot be reached, "then it's back to the front lines, back to a state of conflict, but on a larger scale than before."

According to a report by Fox News on the 24th, cited by Xinhua News Agency, a U.S. official revealed that the agreement, which could reshape geopolitics, is currently "95% complete." Both sides have reached an understanding on Iran's "nuclear stockpile" and issues related to the Strait of Hormuz, and are now negotiating the "wording."

Although Iranian Foreign Ministry spokesperson Bagheri later stated, "This does not mean an agreement is about to be signed," and Iranian President Pezeshkian emphasized on the 25th that Iran will not yield to external pressure and "excessive demands," capital markets have already reacted. The futures prices for New York light crude oil and London Brent crude oil for July delivery both fell by over 5%.

Ma Yushu, a strategist at global economic analysis firm BCA Research, noted in an interview that the Middle East situation has become a key variable influencing multiple aspects of the current U.S. administration's decision-making. In his view, geopolitical conflicts have imposed long-term structural inflationary pressures on the U.S. domestic macroeconomy. If the situation persists beyond market expectations, the headwinds and voter backlash faced by the ruling Republican Party in the midterm elections could intensify.

The Pain at the Pump for American Citizens

Multiple recent polls indicate that American citizens' tolerance for U.S. involvement in the current Middle East situation has diminished. According to data from pollster YouGov, the net approval rating for the current administration's foreign policy has dropped to -20%. Simultaneously, as many as three-fourths of Americans describe the current economic conditions as "fair" or "poor," with 63% believing the macroeconomy is worsening further.

Americans are also dissatisfied with the economic situation. The latest survey data from the University of Michigan shows that the U.S. consumer confidence index hit another historic low in May. This marks the third consecutive month of decline, with the index plunging to 44.2 in May, breaking the previous record low of 49.8 set just in April. The survey reveals that 57% of consumers voluntarily mentioned that high prices are severely eroding their personal finances, a significant increase from 50% the previous month. In May alone, consumers' satisfaction with their personal financial situation plummeted by 13%.

According to data from the American Automobile Association (AAA), the national average gasoline price has surged above $4.50 per gallon (1 gallon equals 3.79 liters), a 50% increase since the outbreak of the Middle East situation. The situation is more severe in some states: for example, six states, including Illinois, Nevada, Oregon, and Washington, have seen average gasoline prices exceed $5 per gallon. In California, prices have surpassed $6, the highest in the nation.

Ma Yushu believes that the livelihood crisis triggered by high oil prices remains severe. "When ordinary voters cast their ballots, their core consideration is their own micro-level inflationary pressure. They care about how many extra dollars they have to pay at the gas station each week," he said. He noted that against the backdrop of high global oil prices, while U.S. oil and gas companies have reaped substantial profits, the excess profits of multinational oil giants are entirely different from the disposable income of ordinary citizens. Even if profits could be redistributed, the process involves significant time lags. Therefore, even in traditional oil-producing states like Texas, the economic impact and sense of inflationary deprivation caused by macro-level high oil prices far outweigh any micro-level benefits.

According to the latest data released by the U.S. Bureau of Labor Statistics in May, the U.S. Consumer Price Index (CPI) rose by 3.8% year-on-year in April, marking the highest inflation reading since May 2023. The Producer Price Index (PPI) increased by 6.0% year-on-year, the largest monthly year-on-year rise since December 2022.

The "Fate Line" at the Ballot Box

From historical experience and voter behavior, the months of July and August are often decisive turning points. Ma Yushu stated that typically by late summer, most voters' decisions on which party to support have largely solidified, with subsequent efforts focusing on mobilizing existing support bases. Therefore, in the less than six months ahead, two core public opinion milestones will determine the fate of the ruling Republican Party.

The first critical milestone is the U.S. Independence Day on July 4. Ma Yushu said, "If U.S. forces remain mired in the Middle East situation by then, or if domestic retail energy prices remain high and unmanageable, this sense of geopolitical frustration and inflationary deprivation will translate directly into strong doubts about the Trump administration's governance capabilities. For the Republican Party's midterm elections, this would be a devastating blow to public opinion."

The second milestone involves ongoing legislative efforts in Congress to limit the administration's actions. Recently, bills aimed at restricting the Trump administration from taking more aggressive military actions in the Middle East have been frequently introduced. In Ma Yushu's view, from a political strategy perspective, this is a coordinated offensive by the Democratic Party. Even if such a bill narrowly passes in both houses of Congress, Trump would undoubtedly exercise his presidential veto, and Congress currently lacks the two-thirds supermajority required to override a veto.

"Even knowing this, the Democrats are vigorously pushing for legislative votes, with the core aim of putting it on the record," Ma Yushu explained. The Democratic Party hopes to publicize each representative's stance, thereby declaring their position to all voters. If the Middle East situation deteriorates further or oil prices spiral out of control in the future, all political responsibility and public backlash would fall on the opposing party.

He predicted that if related procedural motions evolve into formal legislative processes and debates in the Senate in the short term, and with Trump certain to exercise his veto, the political propaganda battle between the two parties will intensify significantly. This will subject mainstream U.S. public opinion to a first round of comprehensive and intense impact before summer arrives.

From Strait Shock to Global "Stagflation"

As the lifeline of global commodities, the stagnation of the Strait of Hormuz is being reflected in real time on the global economy's balance sheet.

According to the latest global outlook report released by energy consultancy Wood Mackenzie, the prolonged blockade of the strait constitutes the single greatest threat the global energy market has faced in decades. Currently, over 11 million barrels per day of crude oil and condensate production capacity in the Persian Gulf region are effectively shut in. Simultaneously, approximately 80 million tons of liquefied natural gas (LNG) annually, equivalent to 20% of global supply, remain unable to enter the global market.

Based on Wood Mackenzie's model projections, the global economy faces an asymmetric path test. Even under the most optimistic "rapid peace" scenario, where the strait fully reopens before June, global GDP growth in 2026 would irreversibly slow from the previous year's 3.0% to 2.3%. The global economy would only barely recover to pre-conflict levels by the fourth quarter of this year at the earliest.

If the situation slides toward the extreme scenario of "prolonged disruption," with the strait remaining largely blocked until the end of the year, the global economy would face a shock: even with a cliff-like demand drop of 6 million barrels per day, Brent crude could still approach an epic high of $200 per barrel by year-end. Under this geopolitical black swan impact, the global economy would contract by 0.4% in 2026, with the Middle East macroeconomy suffering a severe 10.7% blow. GDP growth in the EU and the U.S. over the next two years would also be suppressed below freezing points of 1.5% and 1.0%, respectively.

Currently, even peripheral economies without direct trade links to the Middle East are being affected. Due to broken supply chains for commodities, West African countries are facing catastrophic fertilizer shortages, which not only directly threaten local autumn harvests but will also push already high food prices further into next year.

"The Red Sea crisis in 2023 only added a marginal cost of $2 to $3 per barrel of oil, far from enough to shake global macro-inflation," said Artem Abramov, head of oil and gas at energy research firm Rystad. "However, since the Strait of Hormuz crisis erupted in February this year, the baseline increase in global oil prices has already surged by over $40. This cost will be transmitted throughout the supply chain and energy system, severely impacting food security and manufacturing."

Bjørn Vang Jensen, head of ocean freight at logistics company EasySpeed, stated, "For every week the Strait of Hormuz is blocked, the global supply chain must prepare for a full month of widespread disruption." Even so, "alternative options" are insufficient. Jensen noted that attempting to establish backup alternative routes for regular shipping lanes during a crisis involves extremely high sunk costs and systemic burdens. "In normal peacetime, no company or government would ever use them."

Ma Yushu pointed out that under the current circumstances, the high-frequency data most reflective of future trends remains the shipping traffic data for the Strait of Hormuz. This is a hard data point updated daily. He believes that only when the actual shipping volume through the strait shows a substantial, trend-based recovery can it be confirmed from the source that the supply-side inflationary pressures facing the U.S. and global economies are substantively easing.

Data from shipping monitoring website MarineTraffic and the IMF's PortWatch shows that before the Middle East situation erupted, daily vessel traffic through the Strait of Hormuz consistently remained in the high range of 80 to 100 ships. Current traffic has plummeted, with the 7-day moving average hitting rock bottom.

According to a report by Xinhua News Agency, the public relations department of the Iranian Islamic Revolutionary Guard Corps Navy announced on May 24 that in the past 24 hours, a total of 33 vessels, including oil tankers, container ships, and other merchant ships, passed through the Strait of Hormuz.

On May 25, Chinese crew member Jiang Jian (pseudonym), who had been stranded in the Persian Gulf for over 80 days, reported that the container ship he was on took a day and a half to traverse the Strait of Hormuz and leave the dangerous waters, proceeding smoothly without obstruction.

For various reasons, before departure, news about ending the standby period and resuming the voyage was kept strictly confidential. Currently, this container ship, owned by a Chinese company, has officially ended its prolonged anchorage phase that began in early March after unloading cargo at a Persian Gulf port, and is now heading toward Singapore.