Iran Attempts to Strengthen Economic Ties with China Through Control of the Strait of Hormuz

While controlling the vital Strait of Hormuz for oil transportation, Iran has proposed ensuring the passage of crude oil traded in Chinese yuan. This move can be interpreted as Iran strengthening economic ties with China while applying pressure on Western countries.

The Strait of Hormuz is a strategic chokepoint, through which about 20% of the world’s oil is transported. Recently, tensions between Iran, the United States, and Israel have escalated, with Iran warning multiple times of the possibility of blocking the strait. Since the end of last month, Iran has been continuously transporting crude oil to China through the strait, with some analysts believing this is aimed at securing funds by deepening economic relations with China.

Against this backdrop, Iran’s actions seem to seek China’s support amid Western sanctions. It can also be seen as a challenge to the US dollar-based “petrodollar” system, as China has been steadily promoting the international use of its currency, the yuan. Some domestic experts in China believe that Iran’s proposal may symbolically expand the use of the yuan but remain cautious about its actual impact.

Tensions in the Middle East also affect the international oil market. After the statement on strait control, global oil prices experienced volatility, adding uncertainty to the energy market. Additionally, Iran’s move could further escalate tensions between the US and China.

How Iran and China’s economic cooperation will develop in the future, and how the situation in the Strait of Hormuz will evolve, could significantly influence the global economy and energy markets. Iran’s strategic moves are expected to become an important factor shaping future international political and economic landscapes.