China wants to drop dollar in oil trade – Reuters

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President Xi Jinping has reportedly said his country will work to pay for fuel in yuan

Beijing will work to make energy purchases in yuan instead of the US dollar signalling another step towards shifting further away from the greenback, China’s President Xi Jinping has told Gulf Arab leaders as cited by Reuters.

China’s leader highlighted the necessity of the move while speaking at a Chinese-Arab summit that was hosted by Saudi Arabia earlier this week.  Xi had held separate talks with the heads of the Persian Gulf states at the summit that reportedly  brought together 30 leaders from across the region.

The world’s biggest crude importer, China in November ramped up purchases of oil by 12% year-on-year, marking the 10-month high despite the severe pandemic-related restrictions. Chinese state refiners stepped up purchases of US crude oil, while maintaining high imports of Russian oil prior to the December 5 European embargo and imposition of an oil price cap.

China’s independent refiners also moved a record amount of deeply discounted Iranian crude passed off as oil sourced from Malaysia, which is commonly used as a transfer point for oil originating from the sanction-hit Venezuela and Iran.

Saudi Arabia was China’s number one oil supplier in the first ten months of 2022, making up 18% of China’s total crude oil purchases, with imports totaling 73.54 million tons, or 1.77 million barrels per day, Chinese customs data showed.

Keen interest in the yuan and other currencies from major oil importers have arisen in the wake of unprecedented sanctions introduced by Washington and the allies against Russia, one of the world’s biggest oil producers and exporters over Moscow’s military operation in Ukraine.

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