by Andrea Tucci,
Amid rising tensions in the Persian Gulf, a proposal reportedly being considered by Iran could have consequences far beyond the price of oil or the security of maritime routes. According to several international sources, Tehran is evaluating the possibility of allowing oil tankers to pass through the Strait of Hormuz only under one condition: that the oil be paid for in Chinese yuan rather than in U.S. dollars.
If such a scenario were to materialize, it would represent a direct challenge to the petrodollar system, one of the pillars of the global economic order for the past fifty years.
The crisis surrounding the Strait of Hormuz, therefore, is not merely about maritime traffic or energy security. Something deeper is at stake: the competition between the dollar and the yuan for control of the global energy market.
The Strategic Chokepoint of Global Oil
The Strait of Hormuz is one of the most sensitive maritime passages in the global economy. This narrow corridor of water, just over thirty kilometers wide at its narrowest point, connects the Persian Gulf to the Indian Ocean.
Roughly 20 million barrels of oil pass through this stretch of sea every day, accounting for nearly one fifth of global production. Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and Qatar depend heavily on this route to export their crude oil to international markets.
For this reason, analysts often describe the strait as a global energy chokepoint: a small geographic area upon which a vast share of the world’s energy supply depends.
In recent days, however, traffic through the strait has been heavily restricted due to tensions between Iran, the United States and Israel. The consequences were immediate: oil markets reacted with strong volatility, and crude prices climbed back above $100 per barrel, fueling concerns about renewed inflationary pressure on the global economy.
Despite the crisis, the strait is not completely closed. Some vessels — particularly those linked to countries such as India, China and other Asian energy importers — have continued to pass through the area, suggesting that energy flows have slowed but not entirely stopped.
Energy as a Geopolitical Weapon
Some analysts have compared Iran’s strategy in the Strait of Hormuz to the energy policy adopted by Russia toward Europe following the invasion of Ukraine in 2022. In that case, Moscow did not completely halt gas supplies, but instead gradually reduced flows, creating uncertainty in the markets and driving energy prices sharply higher.
A similar logic appears to be emerging in the Persian Gulf. Tehran has not completely shut down the strait, but it appears to be controlling maritime traffic selectively, allowing only certain ships to pass.
In doing so, Iran avoids paralyzing global trade — which would also harm its own economy — while still maintaining strong pressure on energy markets.
Rather than a total closure of the route, the objective seems to be the creation of controlled instability, sufficient to influence prices, political balances and international negotiations.
Iran’s Proposal
It is in this context that Iran’s proposal has emerged: allowing certain tankers to pass through the strait only if oil transactions are conducted in Chinese yuan.
Such a move would carry enormous geopolitical implications. Since the mid-1970s, the international oil trade has been dominated by the U.S. dollar. This system originated in 1974 with an agreement between the United States and Saudi Arabia under which OPEC oil would be sold almost exclusively in American currency.
For decades, this mechanism created a permanent global demand for dollars. Any country needing energy was effectively required to hold dollar reserves to purchase oil, reinforcing the dollar’s position as the dominant currency in the international financial system.
Iran’s proposal therefore directly challenges one of the fundamental pillars of American economic power.
Iran, Sanctions and the Partnership with China
The confrontation between Iran and the United States did not begin today. Tensions date back to the Iranian Revolution of 1979 and have intensified over the years through a long series of economic sanctions.
The restrictions imposed by Washington have targeted Iran’s oil sector and banking system in particular, making it increasingly difficult for Tehran to sell its crude through financial channels dominated by the dollar.
For this reason, Iran has gradually sought alternative systems for energy trade, finding its most important partner in China.
Beijing is now the world’s largest importer of oil and has long promoted the internationalization of the yuan. Reducing global dependence on the dollar has become a central objective of China’s economic strategy.
In recent years China has also sought to strengthen the role of the yuan in energy markets by introducing oil futures priced in yuan on its domestic exchanges, aiming to reduce the dollar’s dominance in international energy trade.
In this context, Iran’s proposal fits into the broader monetary competition between Washington and Beijing.
The Western Response
The crisis in the Strait of Hormuz has prompted the United States to seek support from its allies to ensure the security of maritime navigation.
So far, however, the international response has been cautious.
Several European countries have expressed strong reluctance to become involved in a military operation in the region. Germany in particular has openly stated that it will not participate to any naval conflict to protect ships in the strait.
At the same time, some European governments — including Italy and France — are exploring diplomatic channels aimed at reducing tensions and ensuring the safety of energy routes while avoiding direct involvement in the conflict.
A Possible Split Energy System
Beyond the immediate crisis, many analysts believe the events in the Strait of Hormuz may signal a deeper transformation in the global economic system.
In recent years, several countries — including China, Russia and a number of emerging economies — have begun experimenting with alternatives to the dollar in energy trade.
If a significant share of the world’s oil were eventually traded in yuan or other currencies, the result could be the emergence of a more fragmented global energy system.
In such a scenario, Western markets would likely continue to trade oil primarily in dollars, while an increasing portion of energy trade between Asia, the Middle East and emerging economies might be conducted in alternative currencies.
This transformation would likely be gradual, but it could carry significant consequences for the global economic balance.
What Is Really at Stake
At first glance, the crisis in the Strait of Hormuz appears to concern maritime security and oil market stability.
In reality, it touches on a much broader issue: the future of the international financial order.
For more than half a century, global energy trade has reinforced the dominance of the U.S. dollar. If that equilibrium were to begin to fracture, the crisis in the Strait of Hormuz would no longer concern oil alone — it could become one of the first signs of a broader competition for control of the monetary system of the 21st century.
