Saudi Arabia considering selling oil to China with “yuan”.
Active negotiations are underway between Beijing and Riyadh to sell part of Saudi oil to China with the yuan instead of the dollar.
The Wall Street Journal quoted informed sources as saying that Saudi Arabia was considering selling part of its oil to China for the yuan.
According to the newspaper, “active talks” are underway between Riyadh and Beijing. Such a move could marginalize the pattern of oil dollars that has controlled the global financial system for more than half a century and jeopardize the dollar’s position as an international reserve currency.
China buys more than a quarter of Saudi Arabia’s oil exports, which means that allocating the yuan to these contracts will significantly boost China’s international currency.
At present, 80% of the world’s oil is sold in dollars, and Saudi Arabia has traded exclusively in US currency since 1974. Since then, Washington has provided security guarantees to Riyadh in exchange for Riyadh’s allegiance to the oil dollar mechanism.
China and Saudi Arabia have been discussing the pricing of oil contracts in yuan for six years, but recently the urgency of the talks has increased due to Saudi dissatisfaction with US government policies.
The Wall Street Journal went on to write that US efforts to distance itself from the Saudi-led war in Yemen, which plunged the Middle East’s poorest country into a severe humanitarian catastrophe, to the condemnation of Saudi Crown Prince Mohammed bin Salman for the horrific assassination of Jamal Khashgechi. It has left Riyadh unhappy with what it sees as the US’s duty to meet its security commitments to Saudi Arabia.
Ben Salman recently reportedly declined to respond to Biden calls earlier this month as the US president sought a cheaper source of oil and gas as petrol prices hit record highs.
In fact, the history of America’s great enmity with many oil-producing countries – from Venezuela to Iran and Russia – has left little room for maneuver, as commodity prices and inflation continue to rise and there is no end to it.
