Under de-facto Iranian control, the Strait of Hormuz’s status remains questionable while the Axis of Autocracy, informally composed of China and Iran, accelerate efforts to devalue the U.S. dollar.
Iran controls approximately one-fifth of the world’s oil and natural gas in the Strait of Hormuz, where it recently implemented a new “toll booth” strategy where transit fees are accepted in Chinese Yuan or cryptocurrency.
The vessels are allowed strait transit only after paying tolls in the desired currency and being vetted by Iranian authorities in a display of mutual support.
The cash handling arrangement is not a temporary band-aid, it is a strategic cooperation between Tehran and Beijing, two of the world’s largest trading partners with China being the largest buyer of Iran’s oil exports.
China circumvents most U.S. sanctions by purchasing oil in Yuan, allowing them to bypass the traditional petrodollar system in global markets. Even as combat operations progressed in the region last month, Chinese ships and vessels aligning with Beijing were granted safe passage through the Strait of Hormuz in transaction for the arranged fee. This is no surprise, as the red dragon has historically supplied Iran with military technology that strengthens their combat power and they continue doing so today.
As the United States dissected Iran’s strategic capabilities by airstrike, China continued providing military assistance to rebuild Iran’s anti-aircraft capabilities while Operation Epic Fury was underway. In a common disguise of mediator, China’s advocacy for a ceasefire appears only as a mirage.
President Trump warned the behavior in a Truth Social post calling for Iran to cease tollbooth operations immediately. Trump also said the specifications surrounding Iran’s tolls are “not what he agreed to” in latest peace negotiations.
The presidential-grade warning came in-line with reports of standstill traffic in the Strait of Hormuz that required Japan to deploy additional emergency oil.
It appears China continues to quietly benefit from preferential access to oil lanes and shipping routes while sending military weapons and resources to Iran in exchange.
Even during active conflict between the United States and Iran, China continued to wear the mask of idle spectator while actively participating in subtle economic strategy furthering their own interest. President Trump’s administration is actively negotiating new regional parameters and has provided his clear stance on the latest reports of toll operations in the global chokepoint.
The latest economic uncertainty all but results in Mainers getting the short end of the stick when heating bills arrive this month.
Oil is fungible. If China’s needs are being met, there is less competition for the other oil on the market. China not competing with them keeps prices from rising as much.
Because this is a PROXI WAR with CHINA !! read Gordon chang , and maybe russia…