Iran weighs yuan-based oil trade to allow tanker traffic in Strait of Hormuz

Iran is considering allowing a limited number of oil tankers to pass through the Strait of Hormuz on the condition that payment for oil shipments is made in Chinese yuan, a senior Iranian official told CNN.

According to the official, the proposal is part of a broader plan being developed by the Islamic Republic of Iran to regulate tanker traffic through the strategically important waterway.

The source said Tehran is working on a new framework that would manage the movement of oil tankers passing through the Strait of Hormuz.

Global oil trade is conducted almost entirely in US dollars. One of the few exceptions is Russian oil, which, due to sanctions, is often sold in rubles or Chinese yuan.

In recent years, China has sought to expand the use of the yuan in oil transactions, including efforts to arrange purchases from Saudi Arabia. However, the US dollar continues to dominate global oil markets as the world’s primary reserve currency, while the yuan has yet to gain widespread adoption in international trade.

By Tamilla Hasanova