Iran–U.S.–Israel Tensions Raise Questions Over Oil Trade in Hormuz: Yuan Payment Claims Emerge

Rising tensions between Iran and the United States and Israel are beginning to impact global energy markets, as new claims surface regarding potential changes in oil trade mechanisms through the Strait of Hormuz.

According to regional sources and recent media reports, Iran is considering—or informally encouraging—the use of China’s yuan in certain oil transactions, particularly those involving Chinese buyers. While there has been no official confirmation from Iranian authorities, the reports have drawn attention due to the strategic importance of the waterway and the longstanding dominance of the U.S. dollar in global oil pricing.

The Strait of Hormuz remains one of the world’s most critical energy chokepoints, with approximately 20% of global oil supply passing through the narrow corridor. Any disruption—whether military or economic—has immediate implications for global markets, supply chains, and pricing stability.

The latest developments come amid escalating military tensions in the region. Recent confrontations involving Iran, as well as actions by U.S. and Israeli forces, have increased security risks across key maritime routes. Shipping insurers and logistics operators have already begun adjusting risk assessments, contributing to higher transportation and insurance costs.

Against this backdrop, the possibility of oil being traded in currencies other than the U.S. dollar has re-emerged as a point of discussion among analysts. The so-called “petrodollar system,” which has underpinned global oil trade since the 1970s, is based on the widespread use of the dollar for energy transactions. Any shift away from this system—if confirmed and expanded—could have long-term implications for global financial structures.

However, experts caution that such a transition, if it occurs, would likely be gradual rather than immediate. The global energy market remains heavily dollar-dependent, and alternative currency systems would require broader adoption, liquidity, and institutional support to become viable at scale.

China, as one of the world’s largest energy importers and a key buyer of Iranian oil, is seen as central to any potential shift. Increased use of the yuan in bilateral trade arrangements has been discussed in recent years, though its expansion into mainstream oil pricing remains uncertain.

Meanwhile, oil prices have shown increased volatility in response to the geopolitical developments. Market participants continue to monitor both the security situation in the Strait of Hormuz and any confirmed changes in trade settlement practices.

For now, the reports surrounding yuan-based oil transactions remain unverified, but they highlight growing interest in alternative financial mechanisms within the global energy trade.