🚨 The Chinese Yuan just hit a 3-year high against the US Dollar after reports that Iran has started accepting oil payments in Yuan.
This is not just a currency move. This is a direct challenge to the petrodollar system that has underpinned the US Dollar's dominance for over 50 years.
The petrodollar works because oil, the world's most traded commodity, is priced and settled in US Dollars. Every country that needs oil needs Dollars first. That creates a permanent global demand for the Dollar regardless of what the US economy is doing.
If major oil producers start accepting Yuan instead, that demand starts to erode. Slowly at first. Then faster.
Saudi Arabia has already been in discussions about Yuan-priced oil deals. Russia has been settling energy trades in Yuan since 2022. Now Iran. The list is growing.
The Dollar is not going anywhere overnight. But every oil deal settled in Yuan is one less reason the world needs to hold Dollars in reserve.
Is the petrodollar at risk? It is already being chipped away. The question is how fast.