China’s Presiden Xi Jinping proposed that Gulf states accept payments for crude oil in the yuan, Reuters reported. According to the Chinese leader, this move could help weaken the dominance of the United States in the global oil market.
Saudi Arabia’s authorities say Beijing lobbies for the use of the yuan, and not the US dollar, in oil trade. They reckon that selling small amounts of oil in the yuan could make sense but doubt that it is the right time for a full-fledged transition to settlements in the yuan.
Analysts say that the move would weaken the grip of the United States on the global hydrocarbon market and help establish the yuan as an international currency. Currently, most of Riyadh’s assets and reserves are in dollars.
China would "make full use of the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trade," President Xi said.
Beijing has also benefited from purchasing Russian crude. Between April and June 2022, China bought oil from Russia at a discount of $108 per tonne.
