Global oil markets are shifting toward energy trades settled in currencies other than the US dollar
The Chinese yuan now settles 15% of global oil trades, challenging the fifty-year dominance of the petrodollar through a sophisticated network of futures contracts and digital clearing systems.
The global energy landscape is undergoing a structural shift as the Chinese yuan expands its share of oil trade settlements from 2% in 2018 to 15% today. This transition leverages China's 28% share of global demand, utilizing the Shanghai International Energy Exchange (INE) to settle petroyuan futures in physical lots of 600,000 barrels. To incentivize this shift, major exporters like Saudi Arabia have moved up to 10% of their volumes into yuan-denominated trades, often aided by 2% pricing discounts compared to dollar benchmarks.
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