Hormuz closed, dollar out: Iran only accepts yuan now

For three generations, the global oil trade followed the same pattern: The Gulf sells, Washington protects, the bill comes in dollars.

This agreement broke down this spring.

Yesterday, Iran closed the Strait of Hormuz for the second time, the IEA speaks of the biggest supply disruption in the history of the global oil market. But the real news lies deeper.

Since the end of March, Iran has been operating what the Atlantic Council calls a "toll booth." Merchant ships wanting to pass Hormuz pay a transit fee to Iranian naval units.

• Exclusively yuan is accepted.

Fortune documented the first case on March 26, Lloyd's List confirmed at least two such payments by March 25.

Over 80% of Iranian oil goes to China

The toll accelerates what has been underway for three years. China buys around 80% of Iranian crude oil, consistently settled in yuan.

Saudi Arabia and the UAE clear their energy transactions through mBridge, the PBOC's cross-border digital yuan platform.

According to the BIS, the dollar's share in global oil trade has fallen by up to five percentage points between mid-2024 and February 2026.

• In a foreign exchange market of this size, that's seismic, and a reversal is not in sight.

What began in Washington in 1971 is ending in Hormuz now

The last time the world reserve currency shifted in oil was 1971. Back then, Nixon held a press conference and ended the gold standard.

This time it's running through Iranian naval officers and Chinese banks. Without a press conference, but with the same long-term consequences.

• European companies have roughly two more years in which dollar settlement with China is the convenient option. After that, it becomes the expensive one.

All details & data: Fortune, Atlantic Council, SCMP 

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CHART OF THE WEEK 

CIPS: China's answer to the dollar has reached $26 trillion

The Cross-Border Interbank Payment System launched in 2015 with 19 banks. Ten years later, 1,766 institutions in 124 countries are connected.

Volume has increased tenfold since 2017, and in March 2026, a record of $168 billion was reached in a single day.

CIPS is not yet a SWIFT replacement, however. The yuan still accounts for only around 3% of global payments, the dollar 48%.

What matters is optionality. Beijing is building parallel infrastructure through which trade with Russia, Iran, and parts of the Gulf region is already being processed. With every new US sanction, it becomes more relevant.

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