Saudi Arabia Denies Rumors of Switching from Petrodollar to Chinese Yuan
Amid swirling rumors and speculation, Saudi Arabia has categorically denied reports suggesting a shift from the US dollar to the Chinese yuan for its oil transactions. The speculation arose following claims that Riyadh was poised to diversify its currency options amidst perceived strained relations with Washington.
Initial reports, sparked by a Wall Street Journal article in March, hinted at Saudi Arabia's contemplation of yuan-denominated futures trading with Beijing, potentially altering its long-standing preference for dollar-based oil exports dating back to 1974. This speculative move was portrayed as a diplomatic signal from Riyadh to Washington, highlighting discontent over perceived security support inadequacies.
Despite widespread circulation and commentary, including assertions from sources such as BRICS News, stating the expiration of a purported 50-year petrodollar agreement, energy experts and analysts have debunked these claims as unsubstantiated. Arnaud Bertrand, a noted energy watcher, emphasized that no formal 50-year pact between Saudi Arabia and the US ever existed.
While Saudi Arabia has engaged in diplomatic overtures with China and Russia under Crown Prince Mohammed bin Salman, purportedly due to regional security concerns and policy differences with the US, there remains no concrete evidence of a definitive shift in oil transaction currency.
Recent developments have seen improved diplomatic exchanges between Riyadh and Washington, including talks on potential defense agreements. These discussions underscore ongoing efforts to recalibrate relationships amidst geopolitical shifts in the Gulf region.
