Chinese President Xi Jinping declared this Friday at a summit with the leaders of the Gulf Cooperation Council (GCC) countries that he will work so that oil and gas are traded in yuan, instead of dollars, Reuters reports.
To involve the Chinese currency in the hydrocarbon trade, Xi called on the collective – made up of Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, Qatar and Oman – to “fully utilize” the Shanghai Oil and Natural Gas Exchange.
At the same time, he committed to continue importing “large quantities” of crude oil from GCC countriesas well as expanding imports of liquefied natural gas and strengthening cooperation in upstream oil and gas, engineering services, storage, transportation and refining.
Saudi Arabia is China’s top oil supplier, buying more than 25% of the kingdom’s crude exports. In the past six years, both countries have held occasional negotiations on adjusting their yuan oil accounts.
The entry of the Chinese national currency into crude oil contracts would reduce the preeminence of the dollar on the global market and would boost the prestige of the yuan globally.
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