Islamabad: The petrodollar hegemony might be in danger as the top oil producer in the world is reportedly considering selling oil to China in Yuan rather than the US dollar.
The news was published by Wall Street Journal on Tuesday, which reported that Saudi and Chinese officials were in talks to price some of the Gulf nation’s oil sales in yuan rather than dollars or euros.
Another massive, historic development, and a blow to US unipolar hegemony:
Saudi Arabia is considering selling its oil to China in the Chinese currency the yuan/renminbi.
The petrodollar now has a serious competitorhttps://t.co/Vo9jGSS9Bo
— Ben Norton (@BenjaminNorton) March 15, 2022
Such a deal between the two towering economies could be a deadly blow to the petrodollar paradigm that has controlled the global financial system for over half a century.
Nearly 80% of global oil sales are priced in dollars, and since the mid-1970s the Saudis have exclusively used the US dollar for oil trading as part of a security agreement with the U.S. government.
China, for its part, buys over a quarter of the oil from Saudi Arabia, meaning that denominating those deals in Yuan would significantly boost the international profile of the Chinese currency.
While China and Saudi Arabia have been discussing pricing oil deals in yuan for six years, those talks have recently increased in urgency due to Saudi dissatisfaction with the policies of the US government.
From Washington’s growing efforts to distance itself from the Saudi-led war in Yemen, which has plunged what was already the poorest nation in the Middle East into a drastic humanitarian catastrophe, to its condemnation of Crown Prince Mohammed bin Salman (MBS) over the grisly murder of journalist Jamal Khashoggi, Riyadh is upset over what it feels is the duty of the US to live up to its security commitments to the Kingdom, the Wall Street Journal report said.
