China is on the way to establishing a new world energy order, according to Financial Times (FT). The country’s crude buying spree has greatly contributed to that.
FT observer Rana Foroohar says a new energy order is shaping as China is moving to yuan-based oil settlements with Gulf nations. That would mark a massive shift in the global energy market as China would be at the helm. In December 2022, President Xi met with Saudi and Gulf Co-operation Council leaders, and that is when the petroyuan was born. It is now widely anticipated that the parties would use it in mutual settlements.
Credit Suisse analyst Zoltan Pozsar argues that “China wants to rewrite the rules of the global energy market.” The introduction of the petroyuan is seen as part of an effort to de-dollarise Bric countries and would mark their transition to other currencies in mutual energy payments.
According to Pozsar, the number of renminbi-based oil trades will rise significantly, and China’s cooperation with Gulf nations will expand. FT’s Rana Foroohar suggests that the use of the petroyuan will fuel the de-dollarisation process.
Earlier, President Xi stressed the importance of support from Arab countries in the bid to reduce the dollar’s dominance in the global oil industry. Therefore, the petroyuan trade could pose a threat to Washington’s global influence, Foroohar pinpointed.
