China’s Yuan gambit: Iran considers allowing oil tankers through Strait of Hormuz with a condition

This marks a seismic shift, with nearly 80% of global oil priced and traded in US dollars. If Iran succeeds, it's a bold strike against the petrodollar system.

Iran is considering allowing limited oil tankers through the Strait of Hormuz, but with a condition that might hit the US very hard.

Tehran is reportedly considering allowing limited transit to oil tankers trading in Chinese Yuan rather than US Dollar, according to a report by The Times of India.

This marks a seismic shift, with nearly 80% of global oil priced and traded in US dollars. If Iran succeeds, it's a bold strike against the petrodollar system.

According to the TOI report, Tehran is planning a different move to manage the maritime trade passing through the oil artery, Strait of Hormuz.’

With tensions in the Gulf escalating rapidly, Tehran’s move can benefit Beijing, which has been trying for years to trade global oil in Yuan.

Apart from the Russian crude oil, which is traded in Rubal or Yuan, the majority of global oil trade happens in US dollar.

Tehran is aiming to erode dollar dominance as the petrodollar underpins US financial power.

Iran's move, if enforced, aids this "gambit" by forcing Yuan adoption at a chokepoint and pressuring dollar-reliant economies.

Iran's potential yuan-only rule for Hormuz tanker transits would strike at the heart of US economic power by accelerating de-dollarisation in oil trade. This chokepoint handles 20-25% of the global supply.

Yuan mandates would sideline the US dollar for 80% global oil trade, slashing demand, potentially hiking US borrowing costs by 1-2%, and weakening the dollar 10-20% long-term if BRICS follows.

Blocking non-yuan oil tankers at Hormuz would worsen the global supply crisis, hitting US allies with instant shortages and driving prices beyond the current $100/barrel mark.

As West Asia's war intensifies, President Trump announced US forces obliterated military targets on Iran's Kharg Island, its key oil export hub via one of the region's most powerful bombing raids.

Posting on social media, he spared the island's oil infrastructure for now but warned: if Iran disrupts Strait of Hormuz shipping, "I will immediately reconsider." Hezbollah vows an existential fight against Israel amid Lebanon's displacement crisis, as conflict spreads to Iraq.