Iran is considering allowing a limited number of oil tankers to pass through the strategic Strait of Hormuz, provided that the oil cargo is traded in Chinese yuan, CNN reported quoting an Iranian official.Tehran is working on a new plan to manage the flow of tankers through the key maritime corridor amid escalating tensions in the region, the source told the outlet.
Apart from sanctioned Russian crude which is often traded in rubles or yuan, most global oil transactions continue to be priced in dollars.China has been trying for years to expand the use of the yuan in global oil trade, including attempts to convince Saudi Arabia to accept the Chinese currency for crude purchases. However, the US dollar remains the dominant global reserve currency and the yuan is still not widely accepted in international markets.Concerns over potential disruptions in the Strait of Hormuz, one of the world’s most critical oil transit routes have pushed global crude prices to their highest levels since July 2022, shortly after Russia’s invasion of Ukraine.The tensions escalated after US President Donald Trump announced that American forces had struck Iran’s key oil export hub at Kharg Island.“Moments ago, at my direction, the United States Central Command executed one of the most powerful bombing raids in the History of the Middle East, and totally obliterated every MILITARY target in Iran’s crown jewel, Kharg Island,” Trump said in a post on Truth Social.However, the US president said the operation deliberately avoided Iran’s oil infrastructure on the island, which handles roughly 90% of the country’s crude exports.Trump also warned that the United States could target the oil facilities if Iran continues to obstruct shipping through the Strait of Hormuz.Earlier, the United Nations has warned that restrictions on shipping through the narrow waterway could have serious global consequences.“When ships stop moving through that Strait, the consequences travel fast,” said Tom Fletcher, the UN’s under-secretary-general for humanitarian affairs.“Food, medicine, fertilizer and other supplies become harder to move and more expensive to deliver,” he added.The Strait of Hormuz is one of the world’s most critical maritime chokepoints for oil and gas trade. Any disruption to shipping through the passage raises concerns among major energy-importing nations, including India, which rely heavily on crude imports passing through the route.
