- Iran may allow oil tankers to pass the Strait of Hormuz if payments are made in Chinese yuan, challenging the petrodollar.
- Analysts caution this plan is hard to enforce technically and could trigger political countermeasures from the U.S. and Israel.
- Opening the strait to all but U.S. and Israeli ships could restore nearly 7 million barrels of oil per day to China and India.
In March 2026, a developing CNN report revealed Iran is considering a major shift in global oil trade dynamics. A senior official indicated the country might allow limited oil tanker passage through the critical Strait of Hormuz only if payments are made in Chinese yuan instead of U.S. dollars. This potential move aims directly at undermining the petrodollar system that underpins American financial power.
“From a technical and institutional standpoint, this arrangement is very hard to enforce, particularly in verifying that transactions are truly settled in yuan,” said Gong Jiong, a professor at the University of International Business and Economics in Beijing, according to a report. Another analyst warned the action would be highly politicized, likely drawing severe responses from the U.S. and Israel.
Consequently, any country complying with Iran’s potential yuan requirement would face significant geopolitical risks. “This certainly supports yuan-denominated payments, but it is unlikely to be sustainable,” an analyst told SCMP.
Meanwhile, separate reports from The Kobeissi Letter suggested Iran might open the strait to any country except the U.S. and Israel. If confirmed, this policy would have an immediate and massive impact on global oil supply. China and India alone could restore nearly 7 million barrels of oil per day, representing about 39% of the supply currently offline due to the strait’s closure.
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