Commentary: Hormuz Crisis Fuels China’s ‘Energy-Yuan’ as the Petrodollar Fractures
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* The U.S. wants global buyers for American oil paid in American dollars.
* Some in Washington see leaving the Middle East as a chance to reset security and boost U.S. energy.
* Central banks are diversifying, opening space for the petro-yuan.
The evolution of the global monetary system is the history of shifting credit anchors. From the gold standard to the petrodollar, every transition is born of crisis. Today, the escalating conflict in the Middle East is quietly driving the next great monetary realignment.
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- 2026 US-Iran conflict blockades Strait of Hormuz; Trump pivots to US oil (13.5M bpd, 8% ME dependence) priced in dollars, ditching ME guarantees.
- US "Americas petrodollar" faces production limits, Gulf diversification; dollar share in ME-China oil drops to 52%, RMB rises to 41%.
- Petro-yuan advances with China's $4.1T assets, 10T yuan holdings; global dollar reserves at 56.77%; shift to multipolar energy-yuan via renewables.
1. The U.S. seeks global buyers for its oil paid in dollars.[para. 1]
2. Some Washington factions view Middle East withdrawal as a security reset and U.S. energy boost opportunity.[para. 2]
3. Central banks' diversification creates space for the petro-yuan.[para. 3]
4. Global monetary evolution involves shifting credit anchors from gold standard to petrodollar, driven by crises; Middle East conflict spurs next realignment.[para. 4]
5. In early 2026, U.S.-Iran conflict led IRGC to blockade Strait of Hormuz, plummeting traffic with tolls to Tehran, fracturing U.S.-protected dollar-priced corridor.[para. 5]
6. President Trump faced dilemma: military action risked casualties and oil price spikes crashing markets; retreat threatened petrodollar confidence.[para. 6]
7. In April 2 address, Trump loosened old order, noting low U.S. Middle East oil reliance and urging allies to buy U.S. crude, signaling end to unconditional shipping guarantees for American oil in dollars.[para. 7]
8. Gamble to shift from Middle East petrodollar (1970s Nixon post-gold: U.S. security for dollar oil recycled to U.S. assets) to Americas version; flaw was U.S. trade deficits diluting dollar.[para. 8]
9. U.S. Gulf oil dependence fell from 35% pre-second oil crisis to 8% by 2025; production >13.5 million b/d; some see Middle East exit as chance to reprice security, boost energy.[para. 9]
10. Americas petrodollar construction faces severe hurdles.[para. 10]
11. Production limits: EIA April 8 forecast shows U.S. can't quickly replace Hormuz volumes; Venezuela not viable due to sanctions, infrastructure.[para. 11]
12. Gulf states recalibrate without U.S. guarantees, less dollar pricing/recycling; U.S. energy exports shrinking deficits could cause offshore dollar liquidity squeeze.[para. 12]
13. Old system loosening opens petro-yuan window via diversification; by March 2026, RMB >41% Middle East-China oil settlements (euro surpassed, dollar 52%).[para. 13]
14. Trade settlement insufficient; petrodollar needed recycling—China builds infrastructure, safe assets for RMB holding.[para. 14]
15. China offers low rates, $4.1T net foreign assets late 2025, expanding products; foreigners held >10T yuan assets end-2025, RMB second-largest trade finance currency.[para. 15]
16. Hormuz crisis accelerates fossil fuel exit to energy-yuan; China top consumer, non-fossils >oil by 2025, largest renewables, >40% global novel storage.[para. 16]
17. China packages green tech, grids, finance; RMB internationalization via exports, products, cooperation for energy-industry-finance circular economy.[para. 17]
18. Dollar strong but shifting: late 2025 share in reserves 56.77% (lowest since 1994), total reserves record $13.1T; central banks diversifying.[para. 18]
19. Petrodollar remake, energy-yuan rise reflect supply chain fragmentation, risk elevation; shift to multipolar monetary regime in changing energy landscape.[para. 19]
20. Author: Lu Zhe, chief economist/co-director, Soochow Securities research institute.[para. 20]
21. Views are author's, not Caixin's.[para. 21]
- Soochow Securities
- Soochow Securities (苏州证券) is the firm where Lu Zhe serves as chief economist and co-director of the research institute, as stated in the article.
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