Breaking: Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

[LeGenD]

Unrelated to the Petro Yuan phenomenon, I think the human led manufacturing economies will crash in a decade or two. South Asian countries are playing a loosing game if they think that they can follow the Chinese model for growth. Better to exploit their competence in English language and move towards global service exports. This should be for all industries, not just for tech., back office and app development jobs that this word has become near synonymous to.

Manufacturing will be in demand for as long as human civilizations will exist - how all manner of physical goods will be produced for human consumption? Machines are not necessary in this matter.

Manufacturing plants are creating job opportunities for the working class as well as educated individuals in Pakistan and also in Bangladesh. I bear witness to these developments in person.

Petro-Dollar arrangement was considered when USA became a major customer of oil extracted in the Middle East. Shale Revolution made it possible for USA to reduce its oil imports from the Middle East, however.

The U.S. Shale Revolution - The Strauss Center

The “Shale Revolution” refers to the combination of hydraulic fracturing and horizontal drilling that enabled the United States to significantly increase its production of oil and natural gas, particularly from tight oil formations, which now account for 36% of total U.S. crude oil production...

www.strausscenter.org

U.S. Imports from Persian Gulf Countries of Crude Oil (Thousand Barrels per Day)

www.eia.gov

S. Arabia becomes largest oil supplier to China in 2020

- Saudi's oil exports to China amounts to approximately 1.69 million barrels per day in 2020, up 1.9% year over year - Anadolu Agency

www.aa.com.tr

China has become a major customer of oil extracted from the Middle East lately.

China’s crude oil imports surpassed 10 million barrels per day in 2019 - U.S. Energy Information Administration (EIA)

www.eia.gov

Petro-Yuan arrangement is aimed to cater to Chinese transactions in this respect.

Petro-Dollar arrangement is one of the factors that prevents USD depreciation:

Think BTC is a Dirty Business? Consider the Carbon Cost of a Dollar

Note: This was originally published in Climate Money, a Substack where I share shorter updates alongside longer dispatches like this one…

susanfsu.medium.com

While KSA is embracing Petro-Yuan arrangement, it will not ditch Petro-Dollar arrangement anytime soon. KSA wants to play its cards safely as well.

USA is increasingly capable of coping with reduction in global Petro-Dollar flows with Shale Revolution and shift to electric vehicles from traditional vehicles. USA might restructure its energy sector further in coming years.

 

[MultaniGuy]

This is good news. But I am waiting to read this on the Arab News.

 

[Mujahid Memon]

backed by military force

Backed by this military?

 

[jamal18]

Backed by this military?

Yes, true.

Despite all this, the US with it's Western vassal states, is the most powerful in the world. Russia has the economy of South Korea and is no match.

 

[cloud4000]

What prevents China from doing what the US currently does with its currency, by weaponizing it?

Besides, both the USD and Yuan are both reserve currencies. USD may dominate but it’s not the only game in town.

 

[Menace2Society]

Pakistan must raise a 1 million man army and station them in the mideast along with 20 warheads to provide them security so they can make independent decisions. The only issue for them has always been security.

 

[LeGenD]

Nope, China government officially launched "Made in China 2025" in May 2015 as part of prevailing 5-Year Plan, Trump wasn't even in the office.

Automation/Robotization (along with AI, super computing) is the future, but China's target is never US, but aim higher at ultra advanced industrialized economies like Japan, South Korea, Singapore and Germany. By now China captured 5400 robotics patents (43% share of world). In terms of deployment, 44% of world's yearly installed robots are in China. As per this speed of R&D and investment, China is expected to get closer to Japan or Germany automation levels by 2025, but of course on a much bigger scale.

View attachment 824394View attachment 824395

Study: China Far Outpacing U.S. in Worldwide Robotics Patents

The U.S. is fourth in robotics patents, behind China, Japan and South Korea.

www.nextgov.com

This does not refutes my statement:

‘Self-sufficiency’ in key commodities vital for China: Xi Jinping

China needs to establish a ‘strategic baseline’ in key primary commodities such as energy, grains and minerals to ensure it is prepared for international challenges, Xi Jinping says.

amp.scmp.com

"Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration."

 

[Pakistan Space Agency]

... According to the report, the talks with China over yuan-priced oil contracts have been off and on for six years but have accelerated this year as the Saudis have grown increasingly unhappy with decades-old U.S. security commitments to defend the kingdom. ...

Conspiracy theorists, please note this is a bargaining chip used by the Saudis to get concessions out of US and it's been going on for 6 years.

Also note, the US is not panicking neither it's sending it's aircraft carriers to the Middle East or applying any pressure on Saudi Arabia as we speak.

If anything, the Americans want Arabs to create their own NATO so they can concentrate in Asia Pacific.

 

[Mujahid Memon]

Yes, true.

Despite all this, the US with it's Western vassal states, is the most powerful in the world. Russia has the economy of South Korea and is no match.

Those days are long gone

 

[Shotgunner51]

This does not refutes my statement:

‘Self-sufficiency’ in key commodities vital for China: Xi Jinping

China needs to establish a ‘strategic baseline’ in key primary commodities such as energy, grains and minerals to ensure it is prepared for international challenges, Xi Jinping says.

amp.scmp.com

"Chinese leader Xi Jinping realized that China will have to consider economic restructuring after experiencing tensions with Trump administration."

Of course that statement is wrong. Bro you were talking about manufacturing, wasn't it? There is absolutely no possible link between Xi Jinping (who started restructuring the manufacturing sector since 2015) and Trump (who came into office in 2016) in this field.

Not sure why you quote that SCMP link as support, cos it reads commodities, NOT manufacturing.

Xi Jinping's answer to commodities is not some complicated reform or restructuring, but hoarding. Very simple, just load up strategic reserves (onshore and offshore) for oil, gas, grains, iron ore, minerals or whatever necessary. Like this:

​

China hoards over half the world's grain, pushing up global prices

Testy ties with U.S. and Australia could be prodding China to boost food reserves

asia.nikkei.com

 

[Zibago]

Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales​

Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales
One of the core staples of the past 40 years, and an anchor…

Published March 15, 2022

View attachment 824362
View attachment 824361

Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

One of the core staples of the past 40 years, and an anchor propping up the dollar’s reserve status, was a global financial system based on the petrodollar – this was a world in which oil producers would sell their product to the US (and the rest of the world) for dollars, which they would then recycle the proceeds in dollar-denominated assets and while investing in dollar-denominated markets, explicitly prop up the USD as the world reserve currency, and in the process backstop the standing of the US as the world’s undisputed financial superpower.

Those days are coming to an end.

One day after we reported that the “UK is asking Saudis for more oil even as MBS invites Xi Jinping to Riyadh to strengthen ties“, the WSJ is out with a blockbuster report, noting that “Saudi Arabia is in active talks with Beijing to price its some of its oil sales to China in yuan,” a move that could cripple not only the petrodollar’s dominance of the global petroleum market – something which Zoltan Pozsar predicted in his last note – and mark another shift by the world’s top crude exporter toward Asia, but also a move aimed squarely at the heart of the US financial system which has taken advantage of the dollar’s reserve status by printing as much dollars as needed to fund government spending for the past decade.

According to the report, the talks with China over yuan-priced oil contracts have been off and on for six years but have accelerated this year as the Saudis have grown increasingly unhappy with decades-old U.S. security commitments to defend the kingdom.


China buys more than 25% of the oil that Saudi Arabia exports, and if priced in yuan, those sales would boost the standing of China’s currency, and set the Chinese currency on a path to becoming a global petroyuan reserve currency.

While nothing new to regular ZH readers (see this from 2017, “The World’s New Reserve Currency? Everything You Need To Know About PetroYuan“), the idea of a new global reserve currency was reintroduced last week by none other than former NY Fed staffed Zoltan Pozsar who wrote in his latest note that “when this crisis (and war) is over, the U.S. dollar should be much weaker and, on the flipside, the renminbi much stronger, backed by a basket of commodities. From the Bretton Woods era backed by gold bullion, to Bretton Woods II backed by inside money (Treasuries with un-hedgeable confiscation risks), to Bretton Woods III backed by outside money (gold bullion and other commodities).”

And so the pieces of the endgame are falling into place: Russia starving the western world of much needed resources, sending commodity prices ever higher, while it’s silent partner China quietly picks up the pieces and takes advantage of Russia’s isolation to approach all those other “non-western” former petrodollar clients to offer them a new product, the yuan, which Beijing is now actively and aggressively pushing to dethrone the dollar as a global reserve currency.

Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales One of the core staples of the past 40 years, and an anchor...

www.nxtmine.com

This guy also tried to do the same

 

[casual]

This guy also tried to do the same
View attachment 824425

Let's see if MBS can hold on to power. CIA backed color revolution incoming.

 

[Zibago]

Let's see if MBS can hold on to power. CIA backed color revolution incoming.

Obey or you will be destroyed

~Emily from CIA

 

[Titanium100]

CIA backed color revolution incoming.

Lmao.. Let me see first CIA remove Mullah Baradar from Office of all people.. Oh yeah do hogus pokus magic or even Color revolution or whatever it is?

Because if you can't do color revolution or even with outright intervention failed to remove Mullah Baradar in 20 years what makes anyone think this is viable in one of the most militarist zones in the world? It is like trying to do a coup in Rome what could go wrong? Oh Yeah it could lead to WW3..

 

[casual]

Lmao.. Let me see first CIA remove Mullah Baradar from Office of all people.. Oh yeah do hogus pokus magic or even Color revolution or whatever it is?

Because if you can't do color revolution or even with outright intervention failed to remove Mullah Baradar in 20 years what makes anyone think this is viable in one of the most militarist zones in the world? It is like trying to do a coup in Rome what could go wrong? Oh Yeah it could lead to WW3..

Doesn't mean they won't try. US controls global media so they will invent an issue and run with it.