Iran May Allow Oil Tankers Through Strait of Hormuz Only if Trade Is in Chinese yuan

Iran is considering a plan to manage oil tankers that pass through the Strait of Hormuz. This is one of the most important oil routes in the world.

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CNN reported that Iran might allow a small number of oil tankers to pass, but only if the oil is sold in yuan. Iran is developing a plan to manage oil tankers that pass through this important route. In this route, 20% of the world’s oil is transported.

Usually, oil is sold at a price based on the US dollar. However, the only oil that is sold at a different price is the oil from Russia. Russia is under sanctions.

The Strait of Hormuz is a vital route for the world’s oil supply. Market concerns about the Strait have driven oil prices to their highest level since July 2022, the time Russia invaded Ukraine.

The United Nations has warned that any restrictions on shipping through the Strait could have serious humanitarian consequences. UN Under-Secretary-General for Humanitarian Affairs Tom Fletcher highlighted these risks on Friday.

He said that if shipping through the Strait is blocked, the consequences could be very serious. It would make transportation of supplies, medicines, fertilizers, and other essential goods difficult and their delivery more expensive.

China has friendly relations with Iran and is heavily dependent on energy supplies from the Middle East. The world’s second-largest economy receives approximately 45 percent of its oil through the Strait of Hormuz, making this route crucial to its energy security.

The situation worsened when President Donald Trump announced that the United States had heavily bombed military bases near Iran’s Kharg Island oil hub. He also stated that the US Navy would soon begin escorting oil tankers passing through the Strait of Hormuz.