Iran is considering allowing a limited number of oil tankers to pass through the strategic Strait of Hormuz, provided the oil cargoes are traded in Chinese yuan, CNN reported, citing an Iranian official.The source told the outlet that Tehran is working on a new plan to manage the flow of tankers through the key sea corridor amid rising tensions in the region.
Apart from approved 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 increase the use of the yuan in global oil trade, including an effort to persuade Saudi Arabia to accept the Chinese currency for crude oil 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 important oil transit routes, have pushed global crude oil prices to their highest level since July 2022, shortly after Russia’s invasion of Ukraine.Tension increased further when US President Donald Trump announced that the US military had attacked Kharg Island, Iran’s major oil export hub.“Not long ago, at my direction, the United States Central Command carried out one of the most powerful bombing raids in the history of the Middle East, and completely destroyed 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 about 90% of the country’s crude exports.Trump also warned that the United States could target oil facilities if Iran continued to disrupt shipping through the Strait of Hormuz.Earlier, the United Nations had warned that a ban on navigation through the narrow waterway could have serious global consequences.“When ships stop passing through that strait, the consequences escalate exponentially,” said Tom Fletcher, UN Under-Secretary-General for Humanitarian Affairs.“Food, medicine, fertilizer and other supplies have become harder to transport and more expensive to distribute,” he said.The Strait of Hormuz is one of the world’s most important maritime chokepoints for oil and gas trade. Any disruption in shipping through the route raises concerns among major energy-importing countries, including India, which are heavily dependent on imports of crude oil passing through the route.