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Hideo Tamura

【#1361】Allowing Iran to Collect Hormuz Toll Plays into Xi’s Hands

Hideo Tamura ／ 2026.04.14 (Tue)


April 13, 2026

　
Peace talks between the United States and Iran were suspended on April 12, the second day of the negotiations, due to their large gaps. Supported by its strategic partner China, Iran remains tough. China is deeply involved in the Iranian Islamic Revolutionary Guard Corps’ collection of tolls from ships sailing through the Strait of Hormuz. If the U.S. allows Iran to control the strait in order to promptly achieve peace, it will play into Chinese President Xi Jinping’s hands.

China’s ambition to expand yuan settlement

The toll that Iran intends to collect is about $1 per barrel of crude oil on board, amounting to about $2 million for a very large crude oil carrier (VLCC) with a load of 2 million barrels. In peacetime, more than 130 merchant ships per day pass through the Strait of Hormuz. Since the outbreak of the war in Iran, however, about 3,000 ships have been stranded in the Persian Gulf, with traffic through the strait limited to at most several ships per day. If Iran pushes through the toll collection, with peacetime traffic through the strait restored, it will earn $19 million per day or $6.9 billion per year in toll income. For Iran that has been in economic difficulties even since before the war, the huge income will be a much‑needed relief. It has no reason to relinquish the control of the strait.

The toll must be paid only in Chinese yuan or cryptocurrency. More than 90% of Iran’s oil exports are destined for China, with the yuan payment system already in place. Since the digital payment network for cryptocurrency transactions uses a communication system installed by China in Iran, cryptocurrency payments, like yuan payments, are remitted to Hong Kong via the Cross-border Interbank Payment System (CIPS) controlled by the People’s Bank of China. In the Hong Kong market, cryptocurrencies can be converted into yuan, dollars, euros, yen, and other currencies. If Iran controls the strait, ships from Japan, South Korea, India, and many other countries will be drawn into the yuan payment network.

China’s Xi Jinping government aims to penetrate yuan payments into oil-producing countries in the Persian Gulf to encroach on the dominant petrodollar system. In February this year, Xi issued a major decree to make the yuan a global currency. According to exclusive information obtained by the author, the People’s Bank of China has informed Middle Eastern oil-exporting countries that if they conduct oil transactions in yuan, China will purchase the oil at a premium of 14% to the international market price and pay a 1% commission to intermediaries.

Trump’s perilous “business first” approach

What is worrisome is how U.S. President Donald Trump, who tends to be attracted by huge business opportunities, will respond. The U.S. International Development Finance Corporation (DFC), a U.S. government body, has announced that it will insure losses up to $20 billion for ships passing through the Strait of Hormuz. Trump announced a U.S. plan to jointly collect the toll with Iran on April 8 and withdrew it the next day. He should not provide any opportunity that Xi could exploit for expanding the yuan’s influence.

Hideo Tamura is a Planning Committee member at the Japan Institute for National Fundamentals and a columnist for the Sankei Shimbun newspaper.