China's call and the signal given by Saudi Arabia's confirm the US's concerns. The hegemony of the oil dollar is being severely impacted, and the situation where the US dollar is dominant is facing huge challenges.
Recently, Chinese leaders started their trip to the Middle East to participate in the "Three Rings Summit" - China-Saudi Summit, China Overseas Summit and China-Arab Summit. First of all, Saudi Arabia's VIP show of receiving Chinese leaders severely refuted the United States' face. Because in July this year, US President Biden also visited the Middle East, but at that time, Saudi Arabia only sent Prince Bandar bin Sultan, deputy governor of Mecca Province, to pick him up, and the courtesy he gave Biden was only at the level of a deputy governor.
is in sharp contrast to Biden's miserable reception during his visit, Saudi Arabia grandly welcomed the Chinese leaders with the highest courtesy. As soon as the Chinese leader's special plane entered Saudi airspace, four Saudi fighter planes immediately took off to escort. When the special plane arrived at the Saudi capital Riyadh , Saudi Arabia not only fired 21 guns, but also arranged for the concierge aircraft to release red and yellow smoke of Chinese flag elements in the air. Important members of the Saudi royal family and senior government officials also went to the airport to wait...
Secondly, the discussion on the use of RMB settlement in energy, especially oil transactions in Middle Eastern countries has made the United States unable to sleep or eat. Middle Eastern countries such as China and Saudi Arabia use the RMB for transactions, which is exactly the topic we want to focus on today. At the China Overseas Summit, China and the GCC GCC countries reached a consensus on establishing and strengthening China Overseas strategic partnership. In the future, the two sides will deepen cooperation in key areas such as energy to build a three-dimensional energy cooperation pattern. China said at the summit that in the future, China will continue to expand trade exchanges between crude oil and natural gas with GCC countries, and at the same time strengthen cooperation in oil and gas development and clean low-carbon energy technologies. China and Gulf countries are natural partners. China also stated that it will make full use of the Shanghai Petroleum and Natural Gas Exchange platform and strive to promote RMB settlement business of oil and gas trade with Gulf countries.
Of course, the oil RMB is definitely not the time, but the signal sent by Saudi Arabia is enough to impact the hegemony of US dollar oil: Saudi Arabia does have a small-scale plan to use RMB to settle oil trade. According to Reuters , a Saudi source revealed that in order to facilitate the payment of China's imports, Saudi Arabia decided to sell a small amount of oil to China in RMB settlement. However, Saudi Arabia has not yet made a decision when to start testing the waters.
It should be mentioned here that on the eve of the China-Arab Summit, China and Saudi Arabia have completed their first cross-border RMB payment business. There is no doubt that this is a major breakthrough in RMB settlement in the China-Saudi economic and trade process, and a good start for RMB settlement in China-Saudi trading. Saudi Arabia and China have successfully achieved cross-border RMB payment business this time, which also laid a good foundation for RMB settlement and oil transactions.
You should know that since 2013, China has been Saudi Arabia's largest trading partner. At the same time, China is also Saudi Arabia's largest oil buyer, and Saudi Arabia is also China's largest oil supplier. Even as the Russian-Ukrainian conflict broke out and China increased its import of Russian oil, Saudi Arabia's oil exports to China remained firmly ranked first this year. According to relevant data, in the first 10 months of this year, China imported 73.76 million tons of crude oil from Saudi Arabia, accounting for 17.8% of the total imports; the amount of crude oil imported from Russia accounted for 17.4% of the total.
In the context of the US dollar anchoring oil, as Reuters pointed out, "Any move by Saudi Arabia to give up the use of the US dollar in its oil trade will be a shocking move."
It should be noted that the payment and clearing system conditions required by China and Saudi Arabia to use RMB to settle in trade are basically ripe. China and Saudi Arabia have close trade exchanges. If Saudi Arabia sells oil and collects RMB, it can use these RMB to settle other goods imported from China. In this way, the trade exchanges between the two sides can not only improve settlement efficiency, but also avoid the use of a third-party currency - US dollar settlement incurs unnecessary fees and reduce settlement costs.In this way, it is easier to expand trade cooperation between the two countries and achieve greater benefits of win-win cooperation.
So, this is why Saudi Arabia is also ready to move and wants to try to use RMB to settle the settlement in oil transactions with China. However, oil trade is deeply influenced by geopolitical , and most of Saudi Arabia's assets and reserves are US dollars. Therefore, it is obviously unrealistic to let Saudi Arabia abandon the US dollar and use the RMB. Saudi Arabia can only choose to test the waters step by step and explore it step by step.
But no matter what, the signal sent by Saudi Arabia, which is already planning to turn east, is clear: explore the use of RMB settlement in transactions with China, weaken the hegemony of US dollar and oil. And this signal is enough to make the United States sweat continuously. Originally, the exchange rate of the US dollar of is very unstable. Even if RMB oil was not realized in a short period of time, China and Saudi Arabia's strong intention to settle RMB is now enough to have an impact on the US dollar and shake the hegemony of the US dollar in international trade.
