https://sputnikglobe.com/20230108/china-using-petroyuan-in-oil-imports-may-lead-to-new-world-energy-order-1106127192.html
China Using ‘Petroyuan’ in Oil Imports May Lead to New World Energy Order
China Using ‘Petroyuan’ in Oil Imports May Lead to New World Energy Order
Sputnik International
Chinese President Xi Jinping said that Beijing has outlined five "priority" areas in its relations with Gulf countries for the coming years, including the settlement of bilateral oil and gas transactions in the Chinese yuan.
2023-01-08T13:25+0000
2023-01-08T13:25+0000
2023-01-08T13:25+0000
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China’s drive to use the yuan when buying oil from Gulf nations may result in the creation of a new world energy order, a UK newspaper has reported.It quoted Credit Suisse analyst Zoltan Pozsar as stressing the importance of Chinese President Xi Jinping meeting with Saudi and Gulf Cooperation Council (GCC) leaders in December.According to him, this push comes as part of “a larger effort to de-dollarize” BRIC countries, including Brazil, Russia, India and China, “and many other parts of the world after the weaponization of dollar foreign exchange reserves” following the beginning of the Russian special military operation in Ukraine on February 24, 2022.During the GCC summit, the analyst recalled, President Xi announced that over the next three to five years, China would not only dramatically increase imports from GCC nations, but work towards “all-dimensional energy co-operation.”Although it doesn’t turn the renminbi into a substitute for the dollar as a reserve currency, “the petroyuan trade nonetheless comes with important economic and financial implications for policymakers and investors,” according to the UK news outlet.“This could be the beginning of what Pozsar calls a ‘farm to table’ trend in which "China tries to capture more value-added production locally, using cheap energy as a lure.”China is already conducting trade with many partners, including Russia, in the yuan, gradually moving away from the greenback. In the latest sign of Beijing’s push for de-dollarization, Chinese officials earlier in the week extended trading hours for the onshore yuan as part of the government’s attempt to increase the international use of the currency. The yuan appreciated past 6.9 per dollar, reaching its strongest levels in four months after China announced the trading hour extension.'Fine' Prospects for Russia on Oil MarketIlya Kalenkov, director general of the Russian equipment manufacturer Evropeiskaya Elektrotekhnika, has meanwhile told Sputnik with the world unsuccessfully trying to shift to green energy, Russia, which is conducting trade transactions with China in the yuan, has “fine” prospects in the global energy market, which he said would remain in place for years to come.On international oil reserves, Kalenkov claimed that they would unlikely run out in the foreseeable future and that the quantity and the availability of “black gold” will depend on the development of modern technologies.He recalled that oil is currently extracted from a depth of 3-3.5 kilometers, and this is considered the norm for oil production. 40 years ago, however, oil production was conducted from a depth of just 1.5 kilometers, and all oil reserves at a greater depth were considered unrecoverable, according to Kalenkov.
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china’s drive to use the yuan when buying oil from gulf nations, chinese president xi jinping's meeting with saudi and gulf cooperation council (gcc) leaders in december, 'fine' prospects for russia on oil market
china’s drive to use the yuan when buying oil from gulf nations, chinese president xi jinping's meeting with saudi and gulf cooperation council (gcc) leaders in december, 'fine' prospects for russia on oil market
China Using ‘Petroyuan’ in Oil Imports May Lead to New World Energy Order
December saw Chinese President Xi Jinping meet the leaders of Saudi Arabia and the Gulf Cooperation Council nations. Xi said at the time that Beijing has outlined five "priority" areas in its relations with the Gulf countries for the coming years, including the settlement of bilateral oil and gas transactions in the Chinese yuan.
China’s drive to use the yuan when buying
oil from Gulf nations may result in the creation of a new world energy order, a UK newspaper has reported.
It quoted Credit Suisse analyst Zoltan Pozsar as stressing the importance of Chinese President Xi Jinping meeting with Saudi and Gulf Cooperation Council (GCC) leaders in December.
Pozsar argued that the gathering “marked the birth of the petroyuan,” reflecting China’s push “to rewrite the rules of the global energy market.”
According to him, this push comes as part of “a larger effort to de-dollarize”
BRIC countries, including Brazil, Russia, India and China, “and many other parts of the world after the weaponization of dollar foreign exchange reserves” following the beginning of the Russian special military operation in Ukraine on February 24, 2022.
During the GCC summit, the analyst recalled, President Xi announced that over the next three to five years, China would not only dramatically increase imports from GCC nations, but work towards “all-dimensional energy co-operation.”
“This could potentially involve joint exploration and production in places such as the South China Sea, as well as investments in refineries, chemicals and plastics. Beijing’s hope is that all of it will be paid for in renminbi [juan], on the Shanghai Petroleum and Natural Gas Exchange, as early as 2025,” Pozsar noted.
Although it doesn’t turn the renminbi into a substitute for the dollar as a reserve currency, “the petroyuan trade nonetheless comes with important economic and financial implications for policymakers and investors,” according to the UK news outlet.
It pointed to “the prospect of cheap energy”, which is “already luring western industrial businesses to China”, where Germany’s BASF’s main plant in Ludwigshafen was recently moved (as an example).
“This could be the beginning of what Pozsar calls a ‘farm to table’ trend in which "China tries to capture more value-added production locally, using cheap energy as a lure.”
China is already conducting trade with many partners, including Russia, in the yuan, gradually moving away from the greenback. In the latest sign of
Beijing’s push for de-dollarization, Chinese officials earlier in the week extended trading hours for the onshore yuan as part of the government’s attempt to increase the international use of the currency. The yuan appreciated past 6.9 per dollar, reaching its strongest levels in four months after China announced the trading hour extension.
'Fine' Prospects for Russia on Oil Market
Ilya Kalenkov, director general of the Russian equipment manufacturer Evropeiskaya Elektrotekhnika, has meanwhile told Sputnik with the world unsuccessfully trying to shift to green energy, Russia, which is conducting trade transactions with China in the yuan, has “fine” prospects in the global energy market, which he said would remain in place for years to come.
7 September 2022, 10:00 GMT
On international oil reserves, Kalenkov claimed that they would unlikely run out in the foreseeable future and that the quantity and the availability of “black gold” will depend on the development of modern technologies.
He recalled that oil is currently extracted from a depth of 3-3.5 kilometers, and this is considered the norm for oil production. 40 years ago, however, oil production was conducted from a depth of just 1.5 kilometers, and all oil reserves at a greater depth were considered unrecoverable, according to Kalenkov.
