Iran War Tests Petrodollar Dominance Amid Opaque Oil Deals

The Iran war has caused significant disruptions to global oil supplies, particularly in Asia where about 60% of imports come from the Middle East. With the closure of the Strait of Hormuz now in its 13th week, major Asian importers have started striking direct arrangements with Gulf producers to secure vital flows of crude.

These deals are often opaque and may involve settlement outside the traditional oil trading system, either through non-US dollar currencies or informal barter arrangements. Iran has also made arrangements with China, Iraq, and Pakistan to move oil and liquefied natural gas out of the Gulf.

The current disruption is likely to leave a lasting imprint on oil trade patterns and may encourage more direct government-backed deals between importers and regional producers.