The war involving Israel, the U.S. and Iran has prompted more countries to use the yuan in trade, including oil transactions, according to Madiyar Kenzhebulat, an economist at the BSR research group. These countries include Persian Gulf states that supply oil to China and purchase goods from Chinese manufacturers.
Shift away from the dollar
«Some have long said that the dollar’s era is ending, while others disagree. I do see certain factors supporting that view, such as Arab countries beginning to conduct major transactions or oil sales in yuan,» Kenzhebulat said during the Tenge Talks podcast.
«Iran wants to switch completely to the yuan; it already receives all its payments in yuan. This was one of the main pillars supporting the dollar as a global currency. It is leading to a situation in which many agreements are being renegotiated,» he said.
If the U.S. fails to achieve its original objectives in the conflict, that could further accelerate the shift away from the dollar in international settlements, Kenzhebolat noted. However, he believes a full transition from the dollar to the yuan could take decades.
Russia’s growing use of the yuan
Russia also sells oil to China in yuan. Amid sanctions on Russia’s financial sector and the country’s removal from the SWIFT international payments system, the yuan has become the most traded currency on Russia’s foreign exchange market.
Russia also supplied oil to India in exchange for rupees but encountered difficulties converting the proceeds. As a result, media reports have suggested that Moscow is considering selling more oil to India in yuan instead.
Read also: Experts warn the dollar’s 2026 outlook remains bleak.
