Payment flows through China’s Cross-Border Interbank Payment System — a yuan-denominated alternative to SWIFT — through barter arrangements in which Chinese companies build airports and refineries in Iran in exchange for oil via a network of front companies, which the US Treasury has tried for years to sanction with limited effect.
Since the war began, Iran has sent at least 11.7 million barrels of crude to China through the strait, according to TankerTrackers.com — every barrel outside the US dollar system moves freely, while Emirati, Kuwaiti, and Saudi tankers sit stranded. Iran has also floated the possibility of conditioning broader access to the strait on
yuan settlement — a proposal that would formalize what is already happening in practice.
This infrastructure, stress-tested in wartime, seems unlikely to disappear after the fighting stops.
For leaders of global businesses, the question is not whether the petrodollar is dying. Instead, it’s whether the cost of operating exclusively within dollar-denominated systems is rising relative to the alternatives, and if it’s worth the price.