Global Chessboard Daily: Power Plays and Shifting Alliances

Iran has just demanded that all oil flowing through a reopened Strait of Hormuz be paid for in Chinese yuan. In our last look at the Global Chessboard, we tracked the shifting alliances. Today, one of those pieces is trying to flip the entire board. The United States appears close to a deal that would reopen the strait, through which twenty percent of the world’s oil flows. The framework gives Iran a sixty-day window to settle details on its nuclear program in exchange for passage. But the yuan demand changes everything. It’s a direct challenge to the fifty-year-old petrodollar system that underpins American economic power.

Elsewhere, the board is also shifting. Japan just concluded its first-ever full participation in the Balikatan military exercises alongside the United States and the Philippines. This is a significant upgrade from its previous observer role, signaling a new, more active trilateral deterrence posture in the Indo-Pacific. And in Istanbul, Malaysia and Türkiye just launched the LMS Batch Two defense program. This isn't just about selling ships. It’s a deep industrial partnership involving artificial intelligence and combat management systems, forging a military-technical axis far from traditional Western orbits.

Israeli Prime Minister Benjamin Netanyahu has also privately admitted he has, quote, "little ability" to influence President Trump on the emerging Iran deal, a stark admission of Israel's marginalization in these talks. Let’s go back to that deal with Iran. On the surface, it looks like a win for the Trump administration. A reopened Strait of Hormuz avoids the two-hundred-dollar-a-barrel oil prices everyone feared back in 2019. Secretary of State Marco Rubio has been clear that a deal isn't finalized, cautioning that, quote, “You can’t do a nuclear thing in seventy-two hours on the back of a napkin.” He’s right.

But the deal being negotiated isn’t really about the nuclear program. It’s a transactional truce. As one analyst put it, the US and Iran are moving into a “professional relationship.” It’s about economic survival. Here’s the turn. For the U.S., reopening the strait is the goal. For Iran, it’s the leverage. By demanding oil sales be settled in yuan, Tehran is aiming at the foundation of the system. Since the nineteen-seventies, global oil has been priced in dollars. Nations must hold dollars to buy energy, which creates constant, structural demand for U.S.

currency. This is the petrodollar. It allows the United States to run massive deficits and fund its global power projection. Iran’s move is the first real crack in that foundation. Investor Ray Dalio warned this exact scenario could end the dollar’s reserve status, comparing it to Britain's Suez Crisis in 1956—the moment a global empire realized its power was gone. This also explains why Israel is on the outside looking in. Netanyahu’s private admission that he can’t influence Trump isn’t just about this one deal. It shows the White House is prioritizing economic stability and de-escalation over its ally’s security concerns.

The joint US-Israeli attack on Iran on February twenty-eighth failed to stop this. Washington is now cutting a deal that Israel sees as a major threat, and there is nothing they can do about it. Washington may have just won the battle for the Strait of Hormuz. The immediate crisis of an oil chokepoint is being solved. But in doing so, it has accepted the terms for a war over the dollar. The price of oil today may be stable, but the price of American power just became a negotiable instrument.