These days there is such a stir in the world market that it has disturbed America’s sleep. For decades we have been hearing that crude oil is traded across the world in US dollars and this also determines America’s strength. But now a news has come from a very special sea route in the Middle East, which can end the reign of the dollar. Iran has made it clear that if oil ships are to be removed from its territory, then it will have to be paid not in US dollars but in Chinese money i.e. ‘Yuan’ as toll tax. This one decision has made China’s stock market a rocket.
Iran’s new ‘toll point’
The route through which most of the crude oil passes around the world is called the Strait of Hormuz. Amidst war and mutual tension, Iran has greatly strengthened its hold on this important route. According to a news from Money Control, Iran is now charging heavy toll from big oil ships passing through here. This amount has been kept at around $1 per barrel. A big ship carrying oil carries about 2 million barrels of oil. This simply means that a ship has to pay a hefty fee of around 2 million dollars to cross this route. The biggest thing is that Iran is not taking this money in dollars, but in Chinese currency ‘Yuan’ or digital coins.
China’s stock market gained momentum
As soon as the news spread in the market that Chinese money was being used in such a big way in international trade, there was an atmosphere of celebration in the Chinese stock market. When China’s Commerce Ministry confirmed this quoting a report by Lloyd’s List, the shares of companies involved in cross-border payments started touching the sky. There was a spectacular jump of 10% in the shares of China National Petroleum’s financial company ‘CNPC Capital’ on the Shenzhen Stock Exchange. At the same time, shares of ‘Lakala Payment’, a big company providing third-party payment services, rose by about 7.9%. Apart from this, a fintech company named ‘Shenzhen Forms Cintron’ also gained a huge gain of 9.4%.
China’s friendship with Iran is making its old dream come true
China has been trying for a long time to get countries around the world to leave the US dollar and start trading in its ‘Yuan’. Now this use of Yuan on the way to Hormuz has become a living example for China, which the market was eagerly waiting for. Shen Meng, director of ‘Chanson & Company’, a Beijing-based investment bank, says that relations between Iran and China are very good. In such a situation, when Iran is facing war, China’s currency has emerged as a strong and safe option for global capital. This is the reason why investors’ money is coming rapidly into Chinese companies related to payments and oil.
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