Why it matters if Saudi Arabia sells oil in Chinese yuan instead of US dollars
Not for the first time, China is attempting to buy oil in yuan rather than dollars, and now it may have found a willing seller. Saudi Arabia, which sells a quarter of its exports to China, is considering making these sales in yuan, the Wall Street Journal reported.
These negotiations, which have surged and ebbed over the last half-decade, are not likely to fructify soon. For one, Saudi Arabia pegs its riyal to the dollar, so any damage inadvertently dealt to the dollar will hurt its own currency. But the US’ geopolitical hegemony is based so significantly on the petrodollar—with 80% of global oil transactions denominated in dollars—that the question is ever-present. What would the world look like if the petroyuan became the oil industry’s currency of choice?
The US’ economic dominance was built on the petrodollar
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