Iran’s proposal to open the Strait of Hormuz to a limited number of oil tankers on the condition that their cargo be traded in Chinese yuan stands as the most consequential economic manoeuvre of the war so far.
The petrodollar system, formalised in 1974, has structured global finance ever since: oil priced in dollars generates sustained demand for dollar reserves, cementing American financial dominance.
Tehran’s conditional reopening threatens that architecture more directly than any missile Iran has fired, because it replaces a military deterrent with a currency deterrent – a move the United States has no ready counter for on the financial battlefield.
The conflict disrupted approximately 20 per cent of global oil and gas transiting the Strait of Hormuz, driving Brent crude from around $70 to over $110 per barrel within days.
Beijing maintained a formally neutral posture throughout, framing itself as a stabilising voice calling for de-escalation. Ben Cavender, managing director at China Market Research Group, described Beijing as having “very little to lose by staying quiet and a lot to gain by being seen as a neutral party.”
Iran sent at least 11.7 million barrels of crude oil to China through the Strait since the war began on 28 February, all of it headed to Beijing, as broader tanker traffic fell to near nothing. The two economies are joined by a pre-existing architecture of sanctioned oil trade, radar technology exports, and the BeiDou-3 navigation network China installed in Iranian military systems before the first missile flew.
The Pacific Echo of a Gulf War
Western officials think China’s military was studying the US operation in Iran for lessons applicable to a future Taiwan conflict, gaining highly valuable information it would factor into its planning. The transfer of up to 2,400 Marines from Japanese bases to the Gulf, along with the command ship USS Tripoli carrying a squadron of F-35 fighter jets, drew down exactly the forward Indo-Pacific position that US planners would need in any Taiwan Strait scenario.
The weapons arithmetic proved as instructive as the geography: cheap Iranian Shahed-136 drones forced American forces to exhaust expensive intercept systems built for heavier threats, while the US spent the equivalent of four billion dollars in munitions in the opening 72 hours alone.
Evidently, there’s a structural resonance between the two theatres. Israeli defence analyst Amos Ortal said that Iranian area-denial tactics around the Strait of Hormuz were “very similar” to what China would deploy in a future conflict around Taiwan. The weapon systems Tehran used were “very much Chinese, Russian, and Iranian copies of Chinese and Russian capabilities, with the same tactics and the same command-and-control methods” and that both sides were “taking notes.”
The Republic of China’s own Defence Ministry drew strong parallels between Iranian multi-wave missile capabilities and what the People’s Liberation Army would deploy across the Taiwan Strait.
Oil, Chips, and Two Chokepoints
Taiwan Semiconductor Manufacturing Company, TSMC, produces a dominant share of the world’s most advanced chips, assets as strategically concentrated as Kharg Island’s oil terminal.
The island handles roughly 90 per cent of Iran’s crude exports, and speculation about a US Marine ground seizure of the island rose after US Central Command destroyed 90 military targets there on 13 March 2026.
A coercive blockade on the Taiwan Strait would hand Beijing an economic lever of equivalent global reach – the same grammar of chokepoint coercion Tehran applied to Hormuz.
China also amassed reserves of Iranian crude to cushion the supply shock, a model for the energy stockpiling strategy it would employ during its own future maritime pressure campaign.
Wartime Reputation Building
China’s information environment offered a different kind of rehearsal. Chinese censors, whose controls over political content are notoriously strict, allowed a stream of artificial intelligence-generated videos mocking Donald Trump to spread freely across Chinese platforms, with a cartoon from Iran’s embassy in China going wide across social media.
One AI-generated video depicted Trump fabricating answers about the bombing of a school in Minab, Iran, which killed over 165 people, many of them children, with a look into Trump’s brain showing gremlin-like creatures pressing a button labelled “lie.”
Researchers concluded that Beijing would use the war to portray itself as “a stable, peaceful, and predictable alternative to the US,” a message that carries genuine weight among non-aligned Southeast Asian states. China was “quickly becoming seen as a more stable and rational nation compared to the US,” said Ben Cavender, with countries growing “more receptive to trade realignment towards China.”
The Cost of Reassurance Without Evidence
Today’s US intelligence community annual threat assessment softened its projection on Taiwan, concluding that Chinese leaders “do not currently plan to execute an invasion of Taiwan in 2027, nor do they have a fixed timeline for achieving unification.”
The assessment came from the same community whose outdated target coordinates contributed to the strike on the Minab school, and whose internal coherence has frayed under the pressures of the war.
Meanwhile, Donald Trump postponed the Xi Jinping summit, originally scheduled for 31 March to 2 April in Beijing, telling reporters: “Because of the war, I want to be here. I have to be here, I feel. And so we’ve requested that we delay it a month or so.”
Several observers read the postponement as China refusing to join Trump’s proposed naval coalition for Hormuz, according to Muhanad Seloom of the Doha Institute for Graduate Studies
As a direct consequence of the Hormuz closure falling on an energy system already cut off from Russian hydrocarbons, economists forecast eurozone GDP growth falling to 0.5 per cent year-on-year in the second half of 2026.
A Taiwan Strait coercion campaign would be the third such disruption inside a decade, following the same economic grammar: a concentrated chokepoint turned into a geopolitical instrument by an actor with less conventional military capacity than the United States.
Keep up with Daily Euro Times for more updates! Read also:
International Waters, No More: China’s Taiwan Strait
Yonaguni: A New Frontier for China-Taiwan
Beijing Protests Latest U.S. Arms Sales to Taiwan
