Iran Proposes Yuan-Settled Oil Trade to Reopen Strait of Hormuz, Challenging Dollar Dominance

The Strait of Hormuz links the Persian Gulf with the Gulf of Oman and is a strategic export route for Middle Eastern crude oil and liquefied natural gas. Iran closed the strait amid military pressure from the United States and Israel, affecting oil prices and shipping security. Tying tanker access to yuan settlement would challenge the energy-trading system’s longstanding reliance on dollar pricing and expand China’s influence in global financial and energy markets.

As of July 19, 2026, CNN reported that Iran was considering conditionally restoring tanker access through the Strait of Hormuz under a proposal requiring the relevant oil trades to be settled in yuan rather than dollars. Eight countries had begun talks on an agreement. The proposal has not yet been formally implemented, but it has linked the strait’s closure, energy supplies and de-dollarization, creating a new focal point in geopolitical competition involving the United States, China and the Middle East.