Historic turning point: Saudi Arabia is set to finalize oil sale in yuan to China.
Sales could increase the prestige of the Chinese currency and reduce the hegemony of the dollar, creating the petroyuan.
247 - "Saudi Arabia is in intense negotiations with Beijing to fix the price of some of its oil sales to China in yuan, sources said. The initiative would reduce the dollar's hegemony over the global oil market and mark another shift by the world's largest oil exporter towards Asia," notes a report by Summer Said and Stephen Kalin in Dow Jones, published by Valor Econômico.
"China buys more than 25% of the oil exported by Saudi Arabia. If the product is traded in yuan, these sales will increase the prestige of the Chinese currency. The Saudis are also studying including futures contracts denominated in yuan, known as petroyuan, in the pricing model of the state-owned Saudi Arabian Oil Co., known as Aramco," the journalists also write.
"For Saudi Arabia, fixing part of its 6,2 million barrel/day exports in any currency other than dollars would represent a profound change. Most global oil sales – about 80% – are conducted in dollars, and the Saudis have traded oil exclusively in dollars since 1974, through an agreement with the Richard Nixon administration that included security guarantees for the country," they add.
Yesterday, the information was anticipated by international correspondent Pepe Escobar:
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