Shipments through the Strait of Hormuz have effectively ground to a halt, disrupting nearly 20% of global oil supply. West Texas Intermediate crude jumped 3.4% in a single day to $97.20 per barrel. Analysts warn that sustained conflict could push prices as high as $150 per barrel.
Qatar's energy minister cautioned that ongoing clashes could halt Gulf oil production within weeks, posing severe threats to the global economy. At the same time, the U.S. is deploying additional forces to the region and actively weighing ground operations inside Iran. The heightened risk environment is deepening economic uncertainty and rattling markets worldwide.
Iran Proposes 'Yuan for Passage' Deal
Iran has reportedly held talks with major oil importers, including Japan, offering limited tanker transit through the Strait of Hormuz in exchange for settlements in China's yuan. If implemented, this mechanism would allow countries to bypass the U.S. financial system and continue importing energy under current restrictions.
The global oil market has revolved around the dollar-based petrodollar system for decades. If key importers accept yuan payments, it could spark a fundamental shift away from this order and mark the start of a new era in energy finance. China stands as the clear beneficiary, gaining greater influence over oil pricing, payment systems, and energy diplomacy.
This new model could create preferential supply routes or privileged trading blocs for certain nations. Countries more aligned with U.S. policy are likely to remain wary, paving the way for a fragmented, dual-track structure in the global oil market.
Escalating War and Debate on New Financial Order
While the yuan-for-oil idea has drawn interest, short-term price volatility remains driven by military action. Iranian strikes on energy infrastructure in Qatar, Kuwait, and Bahrain are causing mounting disruption. Iran has also threatened to target desalination facilities that supply most of Kuwait and Saudi Arabia's drinking water if the U.S. retaliates.
Rocket barrages against Israeli cities and ongoing retaliatory actions heighten the risk of the conflict spreading further. According to Reuters, Iranian ballistic missile strikes have left numerous casualties, including children.
U.S. President Donald Trump gave Iran a 48-hour ultimatum to reopen the Strait of Hormuz, threatening to target Iran's energy infrastructure if not met. The combination of mounting tensions and emerging currency alternatives in trade is being seen as an unprecedented turning point for global energy dynamics.