Riyadh/Beijing: – Saudi, which has been selling crude oil only against the USD for the last five decades, has started preparations to start selling oil against the Chinese Yuan. Detailed discussions are being held between China and Saudi for this purpose. If the talks are fruitful, it will be a significant jolt for the USD as the international currency. Economists are criticising that the United States has weakened the position of the USD by imposing sanctions against a powerful country like Russia. If Saudi and other Arab countries from the Middle East start selling oil against the Chinese Yuan, major upheavals will be global financing. It could even threaten the superpower status of the United States.
Saudi Arabia produces more than 10 million barrels of crude oil per day. More than 7 million barrels of this oil is exported. China buys nearly 1.8 million barrels per day. China has a more than 25% share in Saudi oil export. Whereas Saudi fulfils 16% of the oil requirement of China. The bilateral trade between the two countries is nearly $50 billion and the fuel sector contributes nearly $10 billion.
In this scenario, Saudi indicating to transact the fuel business in Yuan becomes a significant development. As per the information given by the sources, China and Saudi, the talks have been held for the last six years. But the talks regarding PetroYuan have gained momentum given the increasing differences between Saudi and the United States and the Ukraine-Russia war. It is claimed that the talks are in their final stages. After the reports of the talks between Saudi and China, the demand for the Chinese currency Yuan has suddenly increased, and the value of the Yuan against the USD has increased.
Mixed reactions are being received from within the United States regarding the Saudi-China talks. US State Department spokesman Ned Price said ‘Our allies and partner countries share relations with China differently. We have not told any country to choose between the United States and China. Everyone has the freedom to choose their partners.’ Whereas, during an interview with the ‘Wall Street Journal’, a senior US official said that Saudi could not use Yuan in fuel deals; this is impossible. The senior official retorted that the use of Yuan for fuels deals by Saudi is like stabbing its economy.
Earlier, Russia decided to use Yuan for fuel trades with China. This is identified as part of the efforts by both these countries to reduce the influence of the USD on the global level.
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