The possibility of that is the claim by European Business Magazine, seen via The Bulwark.
A senior Iranian official has told CNN that Tehran is considering allowing a limited number of oil tankers through the Strait of Hormuz — but only if cargo is traded in Chinese yuan, not US dollars. The condition, if formalised, would represent the most significant challenge to the petrodollar system in its fifty-two-year history, striking at the financial architecture that underpins American global power rather than at US military assets.
Color me HIGHLY skeptical of China actually doing this. For 20 years now, it’s run like hell from any situation, event, or financial control or stipulation that would put the yuan “on the spot” as anything close to a backup global reserve currency. President Xi Jinping may be indulging the Iranians in talk but that is likely all.
It's true, per EBN, that sanctioned Russian oil is denominated in yuan when not in rubles, but that's the exception that doesn't challenge the rule.
On the other hand? This:
Since 28 February, between 11.7 and 16.5 million barrels of Iranian crude have transited the Strait to China via shadow fleet under IRGC protection while every other nation’s shipping is locked out. China pays in yuan. China’s tankers move freely. X The architecture for a parallel yuan-denominated energy corridor already exists and is already operating.
On the third hand, that's why Trump is talking about attacking Kharg Island. I doubt Xi wants directly involved in the middle of that.
In any case, EBN caveats the piece at the end by noting China's financial system isn't ready yet to fully eat this whale anyway. That said, though, if anything close to this happened? Or even if some version of the current situation continues — as we see now what the help is that Trump is begging for from Xi, and he doesn't get it? Yes, it would be the biggest dollar erosion since Vietnam and post-Vietnam inflation mingled with the US going off the gold standard.
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