Petrodollar crumbling?
Iran is considering allowing a "limited number" of oil tankers to pass through the Strait of Hormuz on the condition that the oil cargo is traded in Chinese yuan, CNN has reported.
A senior Iranian official told the US news outlet that Tehran is working on a new plan to manage tanker traffic through the strategic waterway on Iran’s southern coast.
Iran has effectively sealed off the strait, allowing only its own and Chinese ships to pass. Before the start of the US-Israeli war on Iran on February 28, at least 20 percent of the world’s oil flowed through it.
Iran’s Islamic Revolutionary Guard Corps (IRGC) says it will attack vessels linked to “aggressor nations,” such as the Gulf states that allow the US and Israel to use their territory for attacks on the Islamic Republic. The IRGC announced that the world should prepare for oil prices "reaching $200."
For decades, most international oil has been traded in US dollars. The earnings from oil sales by Gulf countries, known as "petrodollars," were mostly reinvested into the US economy through the purchase of sovereign bonds issued by the US Treasury.
Since Washington imposed economic sanctions on Moscow in 2022 following the start of the war in Ukraine, sanctioned Russian oil has increasingly been sold in rubles.
After the attack on Kharg Island the next logical step is “boots on the ground” to get complete control of the oil production and flows out of the area. This will definitely be unpopular back in the mainland unless the war is completely over (what that means is up for interpretation) and oil prices are lowered. If this is the next step in “trust plan” Trump is more likely to get it done before the midterm elections to avoid loosing too many seats in congress.
Trump can still dramatically ramp up US oil production
Or Washington can take a page out of Iran's playbook and bomb those tankers couldnt they? I mean, why not? Iran has declared open war on commercial vessels with all of their strikes so if he is as crazed as you claim to say he would or could blow them sky high.
Plus Iran, has a critical weak point, Kharg Island, and while Trump spared the oil assets, he has said that if Iran continues to operate like they are he will reconsider. Thats were 90% of their oil flows out of. It would decapitate their ability to send any oil. Iran would collapse into chaos if they lost this island or if Trump struck it. Its the nuclear killshot option if Trump wanted to ensure an end to Iran as it has been known. I don't think he wants to do it but I will say at this point if Iran keeps playing games and hitting commercial vessels well you are putting him in a place to end your regime.
Scholars and experts have said it would end Iran, but the cost would be enormous to the entire world. The entire economy, military, regime, they need this oil money. Ending it means the end of funds. China, Russia, no one could save them after that it would be game over. Its a nuclear option but its entirely possible with how this has been going.