Payment in Yuan Becomes Requirement for Oil Tankers to Cross Iran's Strait of Hormuz
Iran is reported to be prepared to permit oil tankers to transit the Strait of Hormuz, provided they meet one condition: payment in Chinese yuan, a foreign currency.
As reported on 15 March 2026, recently US President Donald Trump threatened to attack oil infrastructure on Iran’s Kharg Island if Tehran continues to block vessels transiting the Strait of Hormuz.
According to the latest developments, Iran is said to be willing to allow tanker vessels to cross the Strait of Hormuz, provided the transaction uses China’s currency, yuan.
According to CNN, a senior Iranian official stated that Iran is considering permitting a limited number of oil tanker vessels to pass through the Strait of Hormuz on the condition that the crude oil cargo be traded in Chinese yuan. This measure emerges as the Islamic Republic is developing a new plan to manage the flow of oil tanker traffic through the Strait.
Internationally traded crude oil is almost entirely conducted in US dollars, except for sanctioned Russian oil, which is traded in roubles or yuan. Market concerns about the Strait, a critical global energy corridor, have driven oil prices to their highest levels since July 2022.
The United Nations has warned that restricting vessel traffic through the Strait of Hormuz will have significant consequences for humanitarian efforts as the conflict continues.
“When vessels stop moving through the Strait, the consequences spread rapidly. Food, medicines, fertilizers, and other supplies become more difficult to transport and more expensive to ship,” said Tom Fletcher, UN Deputy Secretary-General for Humanitarian Affairs.
The conflict involving Iran began with Israeli and US operations on 28 February 2026. The US-Israeli strikes resulted in the death of Ayatollah Ali Khamenei, Iran’s supreme leader at the time.
Iran subsequently retaliated by attacking Israel, US military bases in Gulf region countries, and closed the Strait of Hormuz. Iran also stated that oil vessels could transit provided that the vessels’ flag states expel US and Israeli ambassadors from their respective countries.