Oil Price Hits $120 as China Blocks US Sanctions on Five Refineries

Traders had already priced in continued Chinese demand for Iranian barrels through opaque shipping channels. Local media reported Hengli alone faces accusations of buying billions of dollars in Iranian crude since 2023.

Shadow fleet vessels and ship-to-ship transfers helped mask the origins of cargo along the route.

However, the injunction shields the refiners only from domestic compliance pressure. They remain exposed to dollar-denominated transaction risks through correspondent banking.

China says it does not recognize US sanctions on Iranian oil purchases and will not comply with them. pic.twitter.com/5qpRfJp04r

— Current Report (@Currentreport1) May 2, 2026

Washington warned global banks last week about handling Hormuz-linked trade flows tied to teapot refiners.

Macro Signal Carries Weight for Crypto and Risk Assets

A floor under oil prices keeps inflation expectations sticky. That tends to delay rate-cut bets and pressure risk assets across the board.

Bitcoin (BTC) has historically tracked oil shock cycles, with Middle East disruptions feeding crypto volatility.

Meanwhile, the order reinforces broader de-dollarization themes circulating through 2026. China has pushed yuan settlement and digital currency rails for cross-border trade.

Iran has separately demanded crypto-denominated transit fees from tankers passing the Strait of Hormuz.

A potential Trump-Xi summit looms on the diplomatic calendar. Markets will watch Mondays open for any sustained reaction.

???????????????? US military C-17 lands in Beijing — preparations begin for Trump-Xi meeting, May 14–15.

Logistics moving. Talks ahead. The worlds two largest economies, face to face.

Source: US military sources / May 3, 2026#Trump #XiJinping #Beijing #USChina #Summit #C17 #Breaking… pic.twitter.com/MmRSWNVqlM

— WarScope???? (@WarScopeGlobal) May 3, 2026

Traders also want to see whether the US responds with secondary sanctions on banks handling refinery payments.

The next test is whether other Chinese firms invoke the blocking rules to challenge US measures.

The alternative scenario sees the order standing as an isolated signal before high-stakes diplomacy resumes.

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