(WSJ) Saudi Arabia is reported to consider selling some of its oil to China in yuan, with talks between the two countries underway.
If the deal materializes, it is expected to thwart the dominance of the US dollar in the petroleum market.
The talks to allow the yuan-priced crude have heightened this year after being on and off for about six years.
The revived talks happen even as Saudi Arabia grows weary of Washington’s lack of support in the Yemen civil war. Saudis also became unhappy with the US’s attempt to create a deal with Iran for its nuclear program.
Saudi Arabia is also considering futures contracts that are yuan-denominated, which will be dubbed petroyuan.
Beijing sources at least 25% of its crude from the total that Saudi Arabia exports, with the move expected to boost China’s local currency, yuan.
The move by Saudi Arabia is now seen as a threat to its relationship with the US which has worsened under President Joe Biden. Meanwhile, China has grown closer to Saudi Arabia, having assisted the oil producer to build its ballistic missiles.
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