China has refused President Trump’s request to help reopen the Strait of Hormuz, leaving the U.S. scrambling for leverage as its war on Iran enters a third week and global oil shipments through the world’s most critical chokepoint grind to a halt.
The rejection, first reported by Fortune on March 18, came alongside the postponement of Trump’s Beijing state visit with Xi Jinping, originally scheduled for March 31. China’s Foreign Ministry called on all parties to “immediately stop military operations, avoid further escalation,” while delivering $200,000 in humanitarian aid to Iran through the Red Cross and Red Crescent.
The message from Beijing is clear: China will not help Washington manage a crisis it created.
China Is Ignoring Trump’s Hormuz Plea, and the US Has Limited Leverage
The Strait of Hormuz carries roughly 20% of the world’s traded oil. Since the Iran conflict began, oil has stopped moving through it entirely, with Gulf oil exports falling by at least 60% according to wire reports. That shutdown has turned a military operation into a global economic emergency.
Trump asked China, the world’s largest importer of Gulf oil, to pressure Iran into reopening the strait. China said no. U.S. allies in Europe also declined the request, according to reporting from the Washington Post and NBC.
“Unable to reopen the Strait of Hormuz alone, Washington now needs its principal strategic competitor to help it manage a crisis of its own making,” said Ali Wyne of the International Crisis Group.
The U.S. has compounded its own problem by transferring military assets from the Indo-Pacific to the Middle East, weakening its posture in the region where it most needs to project strength toward Beijing. Zack Cooper of the American Enterprise Institute put it bluntly: “I think most Chinese experts and officials believe that the United States is undermining itself, so they just need to get out of the way.”
Cooper added that “China is happy to delay the visit and reap the benefits as the United States once again gets bogged down in the Middle East.” The delayed summit also raises questions about whether planned Taiwan arms sales will be pushed back further.
Why a Hormuz Blockade Sends Shockwaves Through Crypto Markets
The transmission mechanism from a Hormuz closure to crypto prices is straightforward: halted oil supply drives energy prices higher, which feeds directly into inflation readings. Higher inflation constrains the Federal Reserve’s ability to cut interest rates, a headwind the Fed has already acknowledged in recent policy statements.
Tighter monetary policy expectations pressure risk assets across the board. Bitcoin, which trades as a risk asset during acute geopolitical shocks, is not immune. During the October 2023 Hamas-Israel outbreak, BTC briefly spiked before correcting as markets priced in broader instability.
The Fear & Greed Index currently sits at 26, deep in “Fear” territory. That reading reflects the compounding uncertainty from the Hormuz shutdown, U.S. strategic overreach, and the growing rift between Washington and Beijing. Whether Bitcoin’s safe-haven narrative holds under sustained macro stress remains an open question.
There is also a secondary effect. Iran has historically used USDT and Bitcoin to circumvent sanctions, and escalation in the conflict typically increases on-chain volumes from sanctioned entities. U.S. Treasury sanctions updates targeting Iran-linked crypto wallets could add regulatory pressure to exchanges and DeFi protocols.
Over the medium term, the picture is more nuanced. Prolonged inflation has historically benefited Bitcoin as investors seek stores of value outside fiat currencies. But in the short term, the risk-off trade dominates, and rising input costs across the economy leave less capital available for speculative assets.
Key Signals to Watch as the Standoff Unfolds
Two concrete developments will shape what happens next. First, any OPEC+ emergency meeting to offset the Hormuz disruption with increased production from non-Gulf members. A credible supply replacement would ease oil prices and reduce the inflation-driven headwind for crypto.
Second, U.S. Treasury sanctions activity. If Washington escalates with new designations targeting Iran-linked crypto wallets or exchanges, that would create direct selling pressure and compliance uncertainty across the market.
A diplomatic breakthrough between the U.S. and China would be the most bullish macro signal, but with the Beijing summit now indefinitely postponed, that path looks narrow. Conversely, further deterioration in U.S.-China relations, particularly if trade talks stall or new tariffs emerge, would compound the risk-off environment already weighing on markets.
Oil futures are the leading indicator. Historically, sustained crude prices above $100 per barrel correlate with elevated crypto volatility as macro traders rebalance portfolios. Current prices already reflect significant supply disruption, but whether markets have fully priced in a prolonged Hormuz closure is uncertain.
China’s calculated patience, positioning itself as peacemaker while the U.S. stretches its military across two theaters, suggests this standoff will not resolve quickly. For crypto markets, that means the Fear regime is likely to persist until either diplomacy produces results or the oil supply picture changes.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.