Arab Times: Is it the time for ‘yuan’ to enter the oil trade?!

[beijingwalker]

Is it the time for ‘yuan’ to enter the oil trade?!​

May 6 2023

The Chinese currency is moving to capture some of the oil deals with oil-producing countries, as well as other forms of energy including gas and other trades. It is still too early, but it seems the time has come; considering the positive signs towards achieving the objective — capturing some deals no matter how small is the world trade volume. Today, the yuan is ranked below the four major currencies in the world. After the US Dollar and the Japanese Yen, the Yuan is ranked fourth globally.

In 2016, the World Bank approved the Chinese currency as part of the international reserved currency, along with the major currency. Given the momentum, it is encouraging as it is opening doors for countries under the heavy burden of the US currency like Argentina to trade in Yuan. It is freeing itself from the burden of increasing the US Dollar reserve and switching to another currency. It seems that other countries will follow suit like Brazil and Turkey.

Oil-producing countries, especially the Gulf states, are the attractions for China. Soon, these countries would have to switch to another currency and use the Yuan to deal with the second largest economy in the world. As the second largest consumer of oil with 16 million barrels of consumption, it is so attractive for Saudi Arabia and Russia, making a fierce competition between them with 17 and 18 percent respective share of the oil market in China. Without hesitation, Saudi Aramco is bound to move ahead with overall energy investments. It is the future consumer in every sector. Perhaps, it will exceed the joint venture of major US oil companies in Saudi Aramco; with China gearing toward offshore relationship, while keeping politics out of the picture.

Definitely, it will take a long time for the Yuan to be freely tradable and acceptable. It depends on China in terms of freeing its currency, without any government interference. For the time being, the main four major currencies are traded freely, considering their availability in any consuming country in the world of major economies. We cannot say the same for the Yuan, which will take hard work to be accepted and available in the markets. Maybe, the volume is not yet enough for the currency to be exchanged and traded, and to ensure stable exchange rate — another timeconsuming mission. At present, the Hong Kong Dollar is the currency used in trading in China’s stock markets; thereby, gaining global confidence. It is interesting to note that oil exporting countries are not yet ready to switch to another currency as their total income are in US Dollar.

In addition, most of their sovereign wealth is invested in the USA and smaller portions are distributed to other matured markets. There is some movement towards China and Kuwait is one of the Gulf countries that succeeded in investing in Chinese stock markets. The Chinese currency has three percent share of global payments, which is nothing compared to the four major international currencies – US Dollar, Euro, Sterling Pound and Yen. Perhaps, the Gulf oil exports to China should be the core of attention. The recent agreement with Saudi Arabia is an example of what the future holds. The gas agreements with Qatar and Abu Dhabi reflect future intentions as well, while Venezuela is selling some of its oil products in Yuan through long-term arrangements. Therefore, the list of those trading or paying in Chinese currency is getting longer.

Is it the time for ‘yuan’ to enter the o...

The Chinese currency is moving to capture some of the oil deals with oil-producing countries, as well as other forms of energy including gas and other trades. ...

www.arabtimesonline.com

 

[beijingwalker]

Saudi Arabia’s BRICS move could help the Chinese yuan
May 6, 2023

TL;DR Breakdown

• Professor predicts boom for yuan with Saudi Arabia’s BRICS move.
• Countries wants to reduce reliance on the US dollar.

Saudi Arabia’s potential entry into the BRICS economic bloc could accelerate the use of the Chinese yuan as a trading currency, according to Professor Ashok Swain, the head of Uppsala University’s Department of Peace and Conflict Research.

Professor predicts yuan boost​

In a recent interview with Al-Monitor, Swain noted that there is no doubt that Saudi Arabia becoming a member of the China-dominated Shanghai Cooperation Organization (SCO) and BRICS, which comprises Brazil, Russia, and some other countries, would boost the bilateral trading being conducted using the yuan as the trading currency.

Saudi Arabia became a dialogue partner of the SCO in March, and the country has expressed interest in joining BRICS. In April, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman Al Saud discussed a potentail partnership between the country and the BRICS. Should the country join this group, it could open Saudi Arabia greater access to markets in Asia and strengthen its ties with countries in the group.

The kingdom is also presently in talks with Beijing to send some of its oil sales to China in yuan. Although discussions regarding yuan-priced oil contracts have been on and off for six years between the two nations, they have intensified this year. Swain noted that oil trade in yuan will be very good for China and could help them against the dollar.

Saudi Arabia would benefit from moving away from the US dollar​

A growing number of countries are moving away from using U.S. dollars to settle trades. China’s yuan recently replaced the USD as the most traded currency in Russia as well as the most used currency to settle cross-border payments in China.

In addition, the BRICS group is working to create a new currency that would reduce its member countries’ reliance on the U.S. dollar. According to former White House economist Benn Steil, a BRICS currency would erode the U.S. dollar’s dominance.

In the same vein, economist Stephen Roach predicted that the yuan and euro would disrupt the U.S. dollar’s dominance, and the three would form a tripolar reserve currency world.

Saudi Arabia’s potential entry into BRICS could offer opportunities for greater bilateral trading using yuan, and its collaboration with BRICS and SCO.

It could also impact the pricing of oil in yuan, could disrupt the U.S. dollar’s dominance in international trade. As more countries move away from the USD, it remains to be seen what impact this shift will have on the global economic landscape.

Saudi Arabia’s BRICS move could help the Chinese yuan – Cryptopolitan

Saudi Arabia’s potential entry into the BRICS economic bloc could accelerate the use of the Chinese yuan as a trading currency, according to Professor Ashok Swain, the head of Uppsala University’s Department of Peace and Conflict Research. Professor predicts yuan boost In a recent interview with...

www.cryptopolitan.com

 

[sammuel]

~

The US dollar is the world’s most-used currency for global transactions. Now China aims to elevate its currency as an alternative. Over the past year, President Xi Jinping's government has struck deals linked to the yuan stretching from Russia and Saudi Arabia to Brazil and even France.

China Wants The Yuan To Rival The Almighty Dollar - Bloomberg

Understand every aspect of the global economy – and know how to make your next move.

www.bloomberg.com

 

[Muji.Iqbal]

Is it the time for ‘yuan’ to enter the oil trade?!​

May 6 2023

The Chinese currency is moving to capture some of the oil deals with oil-producing countries, as well as other forms of energy including gas and other trades. It is still too early, but it seems the time has come; considering the positive signs towards achieving the objective — capturing some deals no matter how small is the world trade volume. Today, the yuan is ranked below the four major currencies in the world. After the US Dollar and the Japanese Yen, the Yuan is ranked fourth globally.

In 2016, the World Bank approved the Chinese currency as part of the international reserved currency, along with the major currency. Given the momentum, it is encouraging as it is opening doors for countries under the heavy burden of the US currency like Argentina to trade in Yuan. It is freeing itself from the burden of increasing the US Dollar reserve and switching to another currency. It seems that other countries will follow suit like Brazil and Turkey.

Oil-producing countries, especially the Gulf states, are the attractions for China. Soon, these countries would have to switch to another currency and use the Yuan to deal with the second largest economy in the world. As the second largest consumer of oil with 16 million barrels of consumption, it is so attractive for Saudi Arabia and Russia, making a fierce competition between them with 17 and 18 percent respective share of the oil market in China. Without hesitation, Saudi Aramco is bound to move ahead with overall energy investments. It is the future consumer in every sector. Perhaps, it will exceed the joint venture of major US oil companies in Saudi Aramco; with China gearing toward offshore relationship, while keeping politics out of the picture.

Definitely, it will take a long time for the Yuan to be freely tradable and acceptable. It depends on China in terms of freeing its currency, without any government interference. For the time being, the main four major currencies are traded freely, considering their availability in any consuming country in the world of major economies. We cannot say the same for the Yuan, which will take hard work to be accepted and available in the markets. Maybe, the volume is not yet enough for the currency to be exchanged and traded, and to ensure stable exchange rate — another timeconsuming mission. At present, the Hong Kong Dollar is the currency used in trading in China’s stock markets; thereby, gaining global confidence. It is interesting to note that oil exporting countries are not yet ready to switch to another currency as their total income are in US Dollar.

In addition, most of their sovereign wealth is invested in the USA and smaller portions are distributed to other matured markets. There is some movement towards China and Kuwait is one of the Gulf countries that succeeded in investing in Chinese stock markets. The Chinese currency has three percent share of global payments, which is nothing compared to the four major international currencies – US Dollar, Euro, Sterling Pound and Yen. Perhaps, the Gulf oil exports to China should be the core of attention. The recent agreement with Saudi Arabia is an example of what the future holds. The gas agreements with Qatar and Abu Dhabi reflect future intentions as well, while Venezuela is selling some of its oil products in Yuan through long-term arrangements. Therefore, the list of those trading or paying in Chinese currency is getting longer.

Is it the time for ‘yuan’ to enter the o...

The Chinese currency is moving to capture some of the oil deals with oil-producing countries, as well as other forms of energy including gas and other trades. ...

www.arabtimesonline.com

Sometimes I wish Saudi Arabia would ditch USA for China.

Maybe that will happen when China becomes the world's largest economy in NOMINAL GDP terms.

 

[nahtanbob]

Sometimes I wish Saudi Arabia would ditch USA for China.

Maybe that will happen when China becomes the world's largest economy in NOMINAL GDP terms.

unless they want to wipe their a**es with yuan