Strait of Hormuz Standoff: Trump Seeks Global Warships, Iran Opens Passage — But Demands Yuan for Oil
As Trump calls on China, France, Japan, South Korea and the UK to send warships to the Strait of Hormuz, Iran declares the waterway "open to everyone except our enemies" — while demanding yuan payments from oil tankers seeking passage.
Introduction
The Strait of Hormuz — the 21-nautical-mile-wide chokepoint through which one-fifth of the world’s oil transits — has become the focal point of the US-Iran war. President Trump has called on China, France, Japan, South Korea, the United Kingdom, and “all countries of the world that receive oil through the Hormuz Strait” to send warships to secure the waterway. Iran’s response has been paradoxical: the strait is open, but only to those who pay in yuan — and only if they’re not allied with the United States.
Trump’s Naval Coalition Call
Facing mounting domestic pressure over a war with no clear endgame, Trump took to Truth Social to demand an international naval presence in the strait.
“Hopefully China, France, Japan, South Korea, the UK, and others, that are affected by this artificial constraint will send ships to the area so that the Hormuz Strait will no longer be a threat by a nation that has been totally decapitated,” Trump wrote.
He claimed “100% of Iran’s military capability” had been destroyed, but acknowledged Tehran could still “send a drone or two, drop a mine, or deliver a close-range missile somewhere along, or in, this waterway.”
Trump promised the US would provide “a lot” of support to participating nations while “bombing the hell out of the shoreline” and “continually shooting Iranian Boats and Ships out of the water.”
US Democratic Senator Chris Murphy pushed back sharply: “On the Strait of Hormuz, they had NO PLAN. I can’t go into more detail about how Iran gums up the Strait, but suffice it to say, right now, they don’t know how to get it safely back open.”
Iran’s Paradoxical Position
Iran has offered a contradictory stance. IRGC Navy Commander Alireza Tangsiri denied the strait was militarily blocked, calling it merely “under control.” Foreign Minister Abbas Araghchi elaborated:
“The Strait of Hormuz is open. It is only closed to the tankers and ships belonging to our enemies, to those who are attacking us and their allies. Others are free to pass.”
But “free to pass” comes with conditions. According to shipping industry sources, Iran is now requiring oil tankers to pay in Chinese yuan rather than US dollars to transit the strait — a move that accelerates the long-discussed petroyuan shift and directly challenges dollar hegemony in global oil markets.
Iran’s new Supreme Leader Mojtaba Khamenei — who replaced his father Ali Khamenei after the elder was killed on the first day of US-Israeli strikes — has vowed to keep the strait closed to Western vessels as leverage in the conflict.
The Yuan-for-Oil Gambit
Iran’s demand for yuan payments represents a seismic shift in global oil finance. For decades, the US dollar has been the dominant currency for oil transactions — the so-called “petrodollar” system that underpins American financial power.
By requiring yuan, Iran achieves three objectives:
- Sanctions evasion — Yuan transactions bypass the US-dominated SWIFT banking system
- Chinese alignment — Deepens the strategic partnership with Beijing, Iran’s most important remaining economic partner
- Dollar challenge — Tests the viability of petroyuan in real-world crisis conditions
China, the world’s largest oil importer, has been developing yuan-denominated oil futures on the Shanghai International Energy Exchange since 2018. The Hormuz crisis provides the first real stress test for this alternative system.
Muted International Response
So far, Trump’s call for a naval coalition has received a muted response:
- China: No commitment. Beijing benefits from the yuan-for-oil arrangement and has no incentive to reopen the strait on American terms
- France, UK: Evaluating options but reluctant to join a US-led operation without a diplomatic framework
- Japan, South Korea: Heavily dependent on Gulf oil but constrained by pacifist constitutions and regional security concerns
- India: Negotiated bilateral passage for Indian vessels with Iran directly, bypassing the coalition question
The Shipping Crisis
The practical impact on global shipping remains severe:
- Vessel traffic: Down from ~100 ships/day to approximately 5
- War-risk premiums: Up 10x for Gulf transits
- Insurance costs: Now exceeding the value of cargo for some routes
- Rerouting: Most tankers avoiding the strait entirely, adding weeks to delivery times
Iran has struck more than a dozen ships attempting to transit the waterway since hostilities began two weeks ago.
Oil Price Trajectory
Iranian officials warn oil could surge beyond $200 per barrel if the standoff continues. Brent crude has already crossed $100, and analysts say the yuan requirement adds another layer of uncertainty to an already volatile market.
The International Energy Agency has called the situation the most severe supply disruption since the 1973 oil embargo.