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Does Iran have a yuan-for-Hormuz oil trade plan? Why analysts in China are urging caution

The world’s most vital energy artery has been largely paralysed since the launch of US-Israeli strikes on Iran last month

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Iran is reportedly considering allowing a limited number of oil tankers to transit the Strait of Hormuz on the condition that the cargo be traded in yuan. Photo: Reuters
He Huifengin Guangdong
Observers in China have reacted cautiously to reports that Iran may allow oil tankers through the Strait of Hormuz if the trade is conducted in Chinese yuan, citing operational feasibility limits and security risks.

While the plan could symbolically advance the use of the Chinese currency, its implementation would face security and feasibility challenges and could strain China-US ties, they warned.

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The Strait of Hormuz, one of the world’s most critical oil shipping lanes, has been largely shut since late last month after multiple attacks on ships as the US-Israel war on Iran intensifies.

Iran earlier officially denied a full closure but restricted passage for US or Israel-linked ships.

Iranian drones and military are believed to be targeting tankers in the strait and the Persian Gulf – both as retaliation and for economic leverage.

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Iran’s new supreme leader has vowed to maintain the blockade. “The lever of blocking the Strait of Hormuz must definitely be used,” Mojtaba Khamenei said on Thursday in his first statement in his new role. The strategic waterway carries about a fifth of global oil shipments.
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On Saturday, a CNN report citing a senior Iranian official said that Tehran was considering allowing a limited number of oil tankers to transit the strait on the condition that the cargo be traded in yuan.

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