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Akbar Novruz

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If you ask who emerged as a loser in Islamabad, the answer is quite clear. After more than 21 hours of face-to-face talks, the most serious negotiations between the US and Iran since the start of the war on February 28, Vice President JD Vance departed without any deal, having announced a blockade imposed by his president during the ongoing war, which entered into its most perilous stage. And for Iran, the answer is equally clear; so is it for the rest of the world, which saw oil markets on the brink of catastrophe again.

But that framing obscures something important. In some part of Moscow, Putin’s finance department will be keeping track of oil money that has more than doubled in one month's time, with Russian mineral extraction tax on crude production soaring from 327 billion roubles to an estimated 700 billion roubles ($9 billion) in April, compared with March, as Reuters has estimated. In Beijing, meanwhile, there will be someone calculating how missile defenses have moved from South Korea to the Gulf region, how a quick-response Marine team has moved out of Japan, and how the summit meeting between Trump and Xi (planned in May) is being held against the backdrop of US overreach, which couldn’t be any better for China.

Who needed Islamabad to fail?

What I am about to demonstrate here has been under the radar, surprisingly. Let us get to the main point, who won and who lost (from the bigger picture):

Before the outbreak of hostilities in February 2026, Russia's oil export earnings had dropped to the lowest level in the post-Ukraine invasion period at $9.5 billion per month due to Ukrainian drone attacks, which caused a reduction in physical exports up to 40%. The Russian economy recorded a fiscal deficit of 4.58 trillion roubles in the first quarter. The projected growth rate for Russian GDP by the IMF was estimated to be 0.8%. And then the bombs dropped on Tehran. The price of Brent crude climbed above $100 per barrel. The gap between the discount prices for Urals crude – the vehicle through which sanctions imposed by the West took a financial toll on Russia – became substantially narrower. The KSE Institute estimates that Russia would earn an additional $97 billion in revenue from the war under its central scenario, more than Russia's entire fiscal deficit in 2025. "What he was spending on the war was, in essence, pawning his country off," says Sergey Vakulenko of the Carnegie Russia Eurasia Center. "That doesn't need to happen anymore. The sound of silence from normally voluble leaders of China and Russia is telling. From their point of view, silence is the best way to let Washington entangle itself in a protracted war in the Middle East."

China's strategic patience: Do nothing and win?

Ever since the war began, China has been constantly under criticism. In my personal observation, in the 'golden age' of information, I was able to notice these in many different aspects and points of view. Nevertheless, all the criticism led to one big question: why is China not reciprocating?

It is possible to give several answers to that question, but for me, China's calculus is different in character. China's disengagement in the war has historical and systematic reasons.

But right now, Beijing does not want oil above $100 — its GDP falls roughly 0.5% for every 25% rise in oil prices, and Europe, which absorbs 15% of Chinese exports, is sliding toward recession. China has no desire for the destruction of Iran, as Tehran provides about 13% of Beijing’s oil requirements. However, China has a vested interest in keeping America entangled in the Middle East, thus preventing the focus of its diplomatic and military attention on the Pacific region. The war with Iran has caused America to re-direct missile defence equipment that was originally slated for South Korea, as well as one battalion of Marines that was intended for use in Japan, say US defense officials speaking to Bloomberg and Stars and Stripes. China has also postponed President Trump’s meeting with President Xi Jinping for weeks now.

It is from this perspective that China’s participation in the Islamabad peace conference should be analyzed. The role of China in the Iran war is especially evident from its critical importance in making Iran agree to Pakistan’s proposal of a two-week ceasefire on April 7. This was crucial because it ensured Iran’s participation in negotiations in Islamabad. China also used its veto power to block a UN Security Council resolution regarding Hormuz on April 7. Both these actions support the policy of maintaining the war at a controlled temperature – warm enough to drain America of its resources but cool enough to keep the world economy running that supports Beijing.

China did not engage, at least physically, but it now knows a great deal about the methods by which America fights wars, thereby losing its stature in the Global South even more. Additionally, China would find America’s military preoccupied somewhere else when it decides to make an land on Taiwan.

This doesn’t literally mean that Moscow and Beijing are pulling Iran’s strings. Iran is an independent player with its own logic, with its own scores to settle, and with its own view of the nuclear issue. But the incentive structure that surrounds Iran should be stated explicitly. With each passing week of this conflict, Russia gains another $1 billion in extra income on oil revenue, money that it would not have had without the war. With each passing week, the focus of America’s armed forces is drawn away from the Asian theater of operations. Both factors are irrelevant to Iran’s own agenda. Its population is suffering casualties, its infrastructure is being destroyed, and its economy, which has been crippled for years by sanctions, is taking yet another hit.

What goes around, comes around

All this 'long journey' to the meeting and the "zero result" outcome after hours of discussion also brought to mind the 2022 Istanbul talks. A well-known Azerbaijani saying that perfectly captures this situation is, 'don't laugh at your neighbor, or you might be next. Also could be stated as, don't gloat, or you might be next.

The 2022 Ukraine talks that almost reached an agreement before falling apart – needs only a cursory mention here. The analogy isn’t perfect, and many might disagree. However, there’s one commonality among all parties involved, which is not subject to dispute. While the West was pushing for Ukraine to continue fighting, its objectives were not aligned with the very existence of Ukraine itself. They merely wanted to cripple Russia. In Iran’s case, the question its policymakers have to ask themselves is whether encouraging resistance against US influence serves their objectives or those of Moscow and Beijing. Undoubtedly, US hegemony cannot be contested by any means, but what is happening right now is nothing but a brief resemblance to a failing empire.

Vance reported that the discussions yielded "substantive discussions" and that a "final and best offer" was still "on the table." The foreign ministry of Iran noted that there had been "mutual understanding" on some matters, with differences persisting on only two or three others. This is a far cry from a total collapse in communications. Rather, it is more like a negotiation that almost reached a point of conclusion but fell short, not for lack of anything further to say but for the lack of surrounding circumstances conducive to reaching it.

Those conditions may be arriving. Let the new phase of the war begin. A US-led naval blockade of Hormuz, if maintained long enough, ensures that Iran has lost the choke point, which has provided it with the majority of its leverage and the majority of its benefactors' gains. Russia will stop profiting from the situation once Hormuz becomes accessible again, as well as when the collapse of world trade due to the blockade has driven the price of oil under $70 per barrel. China stops receiving its benefit from the situation when the economic disruption in Europe is worse than the strategic benefit of overstretched American forces. The interests of the benefactors of Iran are not in maintaining the state of conflict indefinitely, only so long as the cost to themselves remains acceptable.