After weeks of blockades by Iran and the United States in the Strait of Hormuz, it’s clear the narrow waterway is now pivotal to the outcome of the conflict.

The US has begun to escort ships through the narrow passage, but behind the military manoeuvring lies a deeper development: energy security in the Persian Gulf is in a state of profound flux.

As well as the desire by both Iran and the US to control the global flow of oil, gas, helium and fertilisers from the region, the United Arab Emirates (a key US ally) has withdrawn from OPEC in what’s been called a major blow to the oil cartel.

On top of this, Iran has announced plans to introduce tariffs in the Strait of Hormuz as a form of reparations for the damage caused by the war.

If imposed, these tariffs are estimated to be worth between US$40 billion and $50 billion a year to Iran, and would potentially allow it to mitigate the impact of US economic sanctions.

Crucially, tariffs would be a way to cultivate stronger relations with China because they would be denominated in Chinese yuan, not US dollars. This has the potential to significantly alter regional and global power balances.

In fact, such payments have reportedly already been made by vessels going to China, India and Japan, with the Iranian parliament........

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