Will Oil Prices Soar as the U.S.-Iran Truce Frays? The Answer Lies With China.

Oil prices could move sharply if the U.S.-Iran truce unravels, but the article argues the key swing factor is China’s demand decisions. Tanker traffic through the Strait of Hormuz has been slowed by ongoing U.S.-Iran hostility, yet gasoline prices depend on both Persian Gulf flows and Chinese buying. China reduced purchases this spring enough to prevent prices from rising as much earlier in the war, and the market now focuses on when imports might rebound. Longer hesitation is likely to pressure prices lower, while renewed demand could raise them. Other pressures include Russia-Ukraine impacts: wholesale diesel spiked after Russia banned overseas diesel sales and Ukrainian drone attacks damaged Russian refineries. Diesel averaged $4.88 a gallon Monday, up 2.5% week over week, per AAA.