Please see below, an article from EPIC Investment Partners which discusses the possible effects of the US-Iran conflict on the long-term strength of the US Dollar. Received today – 17/04/2026
Even if the US-Iran ceasefire holds, the dollar will not emerge from this episode untouched. Diplomats are still trying to turn the truce into something more durable, but no date has yet been fixed for a second round of talks, while Washington continues to mix negotiation with sanctions pressure and military threats. Israel and Lebanon now have their own separate ceasefire, a reminder that the region’s conflicts overlap rather than resolve in neat sequence. The immediate panic around the Strait of Hormuz may fade. The wider lesson will not.
For years, predictions of the dollar’s decline have run ahead of events. The reason was simple: no other currency offered the same combination of liquidity, legal protection and market depth. There were plenty of complaints about American sanctions, fiscal looseness, and financial power. But oil supplies could be disrupted while money still moved through dollar channels. The dollar endured not because it was beyond criticism, but because there was nowhere else to go.
That is why Hormuz matters for more than crude. The point is not that a few cargoes settled outside the dollar would overturn the system. It is that a conflict over a trade route has become bound up with a broader question about settlement, sanctions, and the extent to which countries can reduce their dependence on the western financial system.
Iran offers a useful example. Its oil trade with China has for years relied at least in part on yuan and other non-dollar arrangements, largely because sanctions left Tehran with few conventional options. What has changed is not the existence of those workarounds, but the context around them. China is now by far the main buyer of Iranian oil, taking more than 80 per cent of its shipped crude last year. In that setting, renminbi settlement no longer looks like a niche sanctions dodge. It starts to look like part of a wider shift in how politically sensitive trade is financed.
That does not make the renminbi a true successor to the dollar. China still has capital controls, limited convertibility and financial markets that lack the openness behind reserve-currency dominance. In a real crisis, investors still run into dollars. The Treasury market remains in a class of its own.
But that is not quite the point. If a country wants to reduce its reliance on the dollar without stepping outside global trade altogether, what realistic state-backed alternative does it have? The euro has scale, but not the same strategic freedom. Gold is not a payments system. Crypto offers workarounds, but not sovereign depth. On that basis, the renminbi is increasingly the only alternative with enough weight to matter.
The contradiction is plain. Washington wants the dollar to remain central not just to the existing financial system, but to newer forms of finance as well, while continuing to use access to that system as a tool of pressure. The talks with Iran are a case in point: diplomacy on one side, sanctions, and naval pressure on the other. That may strengthen America’s hand today. It also gives others a clearer reason to route around it.
The likely outcome is not a neat handover from one reserve currency to another. It is a more fragmented system, in which the dollar remains dominant but less universal, while renminbi-based channels take a larger share of politically sensitive trade. Oil has already eased on hopes that talks may resume and the war may cool. Markets may move on. But the dollar’s aura of inevitability has taken another knock.
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Alex Kitteringham
17th April 2026