The imposed capitulation : a surrender document disguised as “negotiation” presented to Iran by the US is already dead & buried. The non-plan plan – imposing demands while begging for a ceasefire – includes zero uranium enrichment on Iranian soil; full dismantlement of Natanz, Isfahan and Fordow installations; all enriched uranium out of Iran; the missile program extremely restricted; no funding for Hezbollah, Ansarallah and Iraqi militias; the Strait of Hormuz totally opened………. All that in exchange for a vague “cancelling the threat of reimposing sanctions”. The only realistic Iranian response to this accumulated wishful thinking might well be Khorramshahr-4s hitting pre selected targets – consistent with leveraging economic and military deterrence to dictate the real terms. And the real terms are harsh: Closure of ALL US Military bases in the Gulf ; Guarantee of no more wars; End of the war on Hezbollah; Lifting of ALL sanctions; War damage reparations; A new order in the Strait of Hormuz (already in effect: collecting fees just like Egypt in Suez); Missile programme intact………… Whilst this back & forth goes on, oil and gas prices are mired in a vat of volatility, affecting currencies, equities, commodities, supply chains, inflation scares. This is already an out-of-control global economic shock with devastating consequences in progress. Before the war, Iran was producing a little less than 1.1 million barrels of oil a day, sold at $65 a barrel with a $18 discount: thus, in practice only $47. Now, Iran has increased production to 1.5 million barrels a day, selling at $110 (and counting), mostly to China, with a maximum $4 discount. And that does not even include petrochemical sales: which are now on the up and up, and for an array of extra customers. To round it all up, all payments are conducted via alternative mechanisms. Which brings us to a startling fact: for all practical purposes, this is sanctions relief writ large (& bigly).
The Holy Grail in the war is of course the Strait of Hormuz. It is de facto open, but with a toll booth controlled by the IRGC. A toll booth with a twist: veto power over the guest list. Like entering an exclusive private club. To get the IRGC clearance, a tanker needs to pay the toll : $2 million per vessel. This is how it works. You contact an IRGC-linked broker. The broker relays to the IRGC the essential info: vessel ownership, national flag, cargo manifest, destination, crew list, and AIS transponder data. The IRGC runs background checks. If you are not US-linked, not shipping any Israel-linked cargo, and your flag is not part of “aggressor states”, you’re in. Then you pay the toll. In cash – whatever currency you have – but preferably in yuan. Or in crypto. It’s a complex mechanism. The IRGC uses multiple addresses; cross-chain bridges to other networks; over-the-counter desks in jurisdictions way beyond American reach; and integration with all sorts of yuan settlement channels. After the toll is paid, the IRGC issues a VHF radio clearance – complete with a specific time window linked to a narrow 5-mile nautical corridor through Iranian territorial waters, between Qeshm and little Larak island, where the IRGC Navy can visually identify your vessel. You’re free to go. No need for an escort ship. And all of the above applies, for now, to tankers from China, India, Pakistan, Turkey, Malaysia, Iraq, Bangladesh, & Russia. Some don’t need to pay the full toll. Some get exemptions – on government-to-government basis (as in Sri Lanka and Thailand, both described as “friendly nations”). And some don’t pay anything. Welcome to a member’s club with an entrance fee mostly in petroyuan. It took just a single move from Iran to achieve what endless global summits could not : establishing an alternative settlement system – under fire, tested under supreme stress, and on top of it applied in the most consequential chokepoint on the planet.
Each toll paid in petroyuan bypasses the petrodollar, SWIFT and US sanctions – in one go. The Iranian parliament will approve legislation institutionalising the toll booth as “security compensation.” No one saw this coming – and so fast: legalised chokepoint monetisation. Without firing a shot. This is what de-dollarisation trade is really all about. The problem is what is not transiting Hormuz: fertilizers. Over 49% of urea for export comes from the Persian Gulf. Ammonia needs natural gas; but Qatar declared Force Majeure after the attack on South Pars and the Iranian counter-strikes. The IRGC is focused on oil because oil currently finances the toll booth and long term, is at the heart of the post-dollar energy settlement system, fully supported by the Russia-China strategic partnership.
It’s little wonder the The Donald has gone postal…….. In less than a month, the petroyuan rules over the – de facto privatised – most important naval connectivity corridor on the planet. So US Central Command (CENTCOM) will go all out to demolish the toll booth, attempting everything from bombing IRGC installations along the coast and setting up naval escorts for allied tankers to a tsunami of sanctions on toll booth brokers. But what CENTCOM cannot bomb is the precedent of the petroyuan in effect. The whole Global South is watching and doing the “math”. The whole demented enterprise is actually helping a new payment infrastructure to come to light. The war’s financial dimension is even more crucial than missile breakthroughs.
Qatar warned the US, over and over again, that attacking Iran’s energy infrastructure would destroy Doha’s own energy infrastructure. That’s exactly what happened. Qatar’s energy minister al-Kaabi revealed that he warned the US Secretary of Energy, Chris Wright, as well as executives at ExxonMobil and ConocoPhillips day after day. To no avail. Qatar ended up losing 17% of its LNG capacity: $20 billion in lost revenue, and perhaps 5 years to fix it. Al-Kaabi has stated quite clearly he sees the oil price hitting $150 a barrel, and this war could “bring down the economies of the world.” We reach absurdist territory when it’s clear that striking Iran’s South Par generated less than zero strategic advantage. On the contrary: the counterpunch hit the Persian Gulf energy sector. Yet perversity actually rules. Cui Bono ? Yup, ‘Murican gas companies. Iran is betting that the Gulf monarchies will eventually see this. Not really difficult, Tehran is making it quite clear: If you learn to do business with us, We will let you continue to do your own business. The new rules include everything from the Gulf Cooperation Council (GCC) bypassing the petrodollar, to getting rid of established US data centres. And if the GCC wants a new security arrangement, better talk to China. All that while the GCC also has to learn how to deal with this oil shock permanently by repricing the risk premium on their energy supply. Structural reset does not even begin to describe it. As it stands, there’s only one certainty: the GCC will be instrumental in the international financial system implosion as it gets ready to pull at least $5 trillion out of the US market so they may be able to fund their own survival.
To sum it all up: after the attack on the South Pars gas field – the largest on the planet – and the toll booth in the Strait of Hormuz – it’s yuan-gold settlements, all across the spectrum, that are giving the Russia-China strategic partnership an upper hand unthinkable only a few weeks ago. The strategic partnership is locking in no less than a new, rising global settlement mechanism, where petroyuan trades flow straight into physical gold. As Russia sells massive volumes of oil and gas not touched by the war on its ally Iran, China as the top refiner buys Russian energy while at the same time trying to support its Southeast Asian partners outside of the Yankee Dollar, Russia is converting yuan payments into physical gold at the Shanghai Stock Exchange. Iran is accumulating yuan payments in Hormuz – boosting yuan oil contracts that are convertible to gold. And China is building overseas gold vaults and corridors. The new Primakov triangle, RIC (Russia-Iran-China) is in control via real physical energy and gold.
This is the major take away of the war on Iran. For all practical purposes, the architecture set up by the “indispensable nation” since the 1950s is showing structural cracks for everyone to see, with global markets updating every possible model variation in real time. It’s as if the Persians had revisited, re-interpreted & updated Sun Tzu, Clausewitz & Schlieffen for a Brave New World. The petrodollar is on the way out. Alternative payment systems are already up and running. And the Global South is watching in real time how the US can be brought to a standstill by a decentralised war of attrition engineered by a sovereign nation with less than one-fiftieth of the US defence budget………..
© DJM 2026
