Iran-US Truce Opens Hormuz, Yuan Moves In

A two-week conditional ceasefire between the United States and Iran on April 7 has created limited, Iranian military-managed conditions for the reopening of the Strait of Hormuz while Iran's concurrent imposition of yuan-denominated transit fees signals a structural challenge to dollar dominance in energy trade. For Mexico, which depends on Gulf energy flows for petrochemical imports and whose PEMEX revenues are sensitive to oil price shifts, both the supply disruption risk and the gradual erosion of petrodollar conventions carry long-term trade and financial exposure. Shipping operators including Maersk and Hapag-Lloyd warn that new fees of up to US$2 million per vessel and unresolved coordination requirements preclude near-term normalization.

Iran and the United States agreed to a two-week conditional ceasefire on April 7, with provisions for the temporary reopening of the Strait of Hormuz, but shipping analysts and major carriers warned there will be no immediate mass movement of vessels through the channel.

An estimated 2,000 ships and 20,000 seafarers have been trapped in the Gulf since the outbreak of hostilities at the end of February, according to the United Nations, unable to pass through the strait. The trapped vessels include oil and gas tankers, bulk carriers, cargo ships and six tourist cruise liners.

"It still requires ships to essentially seek permission, and that is the key. That means that nothing has changed, no permission, no transit," said Richard Meade, Editor-in-Chief, Lloyd's List Intelligence. "We probably need to temper expectations of there being a mass exodus immediately. Until shipowners have got some sort of detail in terms of what is required of them they are basically going to be waiting to see what happens."

Maersk, the world's second-largest container shipping operator, said the ceasefire "may create transit opportunities, but it does not yet provide full maritime certainty and we need to understand all potential conditions attached," adding it is "working with urgency" to clarify transit procedures. 

Hapag-Lloyd CEO Rolf Habben-Jansen told clients on April 8 it was too early to judge how much traffic would be able to pass through the waterway, and that it would take at least six weeks before the firm could regain a fully normal network. The German carrier estimates around 1,000 merchant ships remain stuck in the Persian Gulf, six belonging to Hapag-Lloyd, with the conflict costing the firm roughly US$55 million per week.

Terms of the Ceasefire

US President Donald Trump announced the agreement via his Truth Social platform, stating he accepted a "suspension of bombings and attacks against Iran for a period of two weeks," contingent on the reopening of the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi confirmed Tehran's acceptance, stating: "For a period of two weeks it will be possible for safe passage through the Strait of Hormuz," provided attacks on Iran cease and transit is coordinated with Iran's armed forces.

Pakistani Prime Minister Shehbaz Sharif, who mediated the negotiations, announced the ceasefire with "immediate effect" approximately 10 minutes before a Trump-imposed deadline expired. Iran submitted a 10-point plan that includes, among other provisions, a total cessation of hostilities in Iran, Iraq, Lebanon and Yemen; full lifting of sanctions; release of frozen Iranian assets; and a commitment that "Iran will not attempt to possess nuclear weapons." Broader negotiations are scheduled to begin in Islamabad on April 10.

Under the terms of the arrangement, passage will remain subject to Iranian military management, a continuation of Tehran's previous traffic control framework, which granted access to vessels it deemed "non-hostile," excluding those linked to the United States or Israel. Reports also indicate that both Iran and Oman are expected to charge transit fees of up to US$2 million per vessel, marking a departure from the strait's previous toll-free status.

Yuan Payments and Dollar Implications

Prior to the conflict, the channel handled approximately 140 vessel crossings per day and roughly one-fifth of global oil and liquefied natural gas supplies. In recent weeks, only about 21 ships per day have passed through.

Under Iran's traffic control regime, commercial vessels have been charged transit fees in Chinese yuan, according to multiple reports, including Lloyd's List. China's Ministry of Commerce acknowledged the practice in a social media post. At least two vessels had made payments in yuan as of March 25, according to Lloyd's List.

"At one level, Iran is aiming to poke its thumb in the United States's eye, adding insult to injury," said Kenneth Rogoff, Economics Professor, Harvard University, and former Chief Economist, International Monetary Fund. "At another level, Iran is dead serious about preferring yuan to avoid US sanctions and to cultivate its ally, China, which has been moving steadily to redenominate its own trade, and that of the BRICS nations into yuan."

Approximately 80% of global oil market transactions are settled in dollars, according to a 2023 estimate by JP Morgan Chase. The yuan accounted for only 3.7% of cross-border trade settlements in 2024, up from less than 1% in 2012, per S&P Global, while the dollar held 57% of global foreign exchange reserves last year compared with 2% for the yuan, according to the IMF.

"This is not really what is going to 'de-dollarise' the world," said Alicia Garcia-Herrero, Chief Economist, Asia Pacific, Natixis in Hong Kong, adding that yuan use in the Strait of Hormuz only "adds incremental pressure and normalises alternatives in energy flows."

Dan Steinbock, Founder, Difference Group, said the growing use of yuan could "chip away" at US dominance in specific sectors over time, describing it as "a question of gradual erosion rather than an abrupt substitution."

Outlook

Both Iran and the United States claimed victory following the announcement. Iranian state television described the agreement as a "humiliating retreat" by Trump, while Trump stated the United States had "accomplished and exceeded all military objectives" and told AFP it had achieved "a complete and total victory." Oil prices fell sharply following the announcement.

Tom Bateman, BBC correspondent for the State Department, noted the ceasefire gives both sides room to de-escalate but cautioned: "We are still trying to clarify what exactly has been agreed." He added that the United States and Iran appear to hold "contradictory positions" on what the ceasefire implies, and that the strait's control and Iran's nuclear program are likely to be contentious points in the Islamabad talks.