On Monday, oil once again dropped below $100 per barrel. Although prices jumped above $104 during the day, they failed to hold at that level.
The market shifted after signals from China. Defense Minister Dong Jun indicated that Chinese ships would continue to pass through the Strait of Hormuz and that U.S. restrictions would not stop them.
China Ignores U.S. Pressure in the Strait of Hormuz
Essentially, China has decided not to play by the rules the U.S. is trying to impose. Beijing made it clear that ships will continue to pass through the Strait of Hormuz as before.
Defense Minister Dong Jun stated this directly. According to him:
“Iran controls the Strait of Hormuz, and it is open to us.”
After this, it became clear that the situation was no longer just about the U.S. and Iran. China is now fully involved, which is a different scale altogether.
The market reacted quickly. Prices began to be recalculated on the fly, as traders started to doubt whether the blockade would work at all.
And there is logic to this. China is the main buyer of Iranian oil, so any restrictions automatically affect its interests as well.
Trump Gives Iran a New Deadline
The situation around the Strait of Hormuz continues to escalate. Donald Trump announced a new deadline for Iran — until April 27. If no agreement is reached, he said, the consequences “will be unpleasant.”
This ultimatum came after failed negotiations between the U.S. and Iran, which took place on April 12 in Islamabad. It was after this that Washington announced a full naval blockade of the strait.
The market reacted sharply. Brent then jumped by more than 8% and broke through the $103 level, but the movement later reversed.
WTI oil price dynamics. Source: TradingView
Now a new factor is emerging — China. Beijing’s willingness to ignore restrictions could directly impact the market. Whether prices stabilize or oil rises again as the April 27 deadline approaches will depend on this.
At the same time, the situation remains ambiguous. According to reports, one of the tankers headed for China was forced to turn back due to U.S. actions.
As market participants note:
“Most likely, the U.S. is using this situation to pressure China and push it to influence Iran, although formally these measures are not directed against Beijing.”
