The world’s top export of oil Saudi Arabia and biggest oil importer China could shakeup the dominance of oil in the global petroleum market.
Saudi Arabia is reportedly in talks to sell oil to China and be paid in yuan instead of dollars, according to Wall Street Journal.
Globally 80% of oil sales are done in dollar. So in the scenario that Saudi-yuan deal to be made it could challenger US leadership in the global financial markets.
The likelihood of a potential deal between Saudi Arabia and China has picked up recently, according to the Journal. The longtime Mideast ally has grown unhappy with the US due to the Biden administration’s reluctance to do more in the Yemen civil war and its push to revive the Iran nuclear deal.
The relationship between Biden and Saudi Crown Prince Mohammed bin Salman hasn’t been stable rather repeatedly the Crown Prince rejected a request for a call with Biden to discuss Ukraine and boost oil production amid the West’s sanctions against Russia.
Besides, last year China depended heavily on Saudi Arabia as its primary crude supplier while economic relationship between Saudi Arabia and the US have dwindled, since the US has become less dependent on Saudi oil in recent years as domestic shale production boomed.
