Significant changes in the global energy landscape have been brought about by Chinese recent signing of large long-term LNG contracts with the United Arab Emirates UAE, which have far-reaching effects that go beyond supply and demand. State-owned behemoths such as Zhenhua Oil, ENN Natural Gas, and China National Offshore Oil Corporation CNOOC have signed contracts with Abu Dhabi National Oil Company ADNOC for deliveries of up to one million metric tons per year beginning in 2026 and 2028, these contracts range from five to fifteen years, the fact that some of these agreements are made in Chinese yuan instead of US dollars is particularly significant since it indicates a conscious challenge to the established petrodollar system that has dominated international energy commerce for many years.
This is a calculated attempt by Beijing to lessen its reliance on U.S. energy imports and consequently, on the dollar in global trade. It goes well beyond a simple business deal. The increasing trade battle between the United States and China, which has made importing U.S goods more difficult, is the backdrop for these deals, the cost of LNG is rising for Chinese consumers, compared to prior years, when American LNG made for around 5% of China's total imports, data indicates that China bought zero LNG from the United States in March 2025, China has had to diversify its energy supplies and build closer relationships with other suppliers, such as the UAE, as a result of this change.
The agreements with ADNOC are part of a larger geopolitical landscape in which China is actively pursuing energy supplies from friendly and dependable allies, one of the biggest oil producers in the world and a key actor in the Gulf, the UAE provides China with a dependable supply of LNG that supports long-term energy security objectives of Beijing, the magnitude of this new collaboration is demonstrated by the fact that ENN Natural Gas has inked the largest LNG contract ever between the UAE and a Chinese company, with a 15-year commitment for one million tons per year, in the meantime, this expanding partnership is further cemented by Zhenhua Oil's comparable agreement and CNOOC's five-year contract beginning in 2026 for 500,000 metric tons yearly.
It is also important that some of these transactions were settled in yuan instead of USD, the petrodollar system, which has served as the foundation of international energy trading since the 1970s, is directly challenged by it, China is helping to internationalize the yuan and lessen its exposure to dollar swings and U.S sanctions by conducting energy transactions in its own currency, this could incite other nations to do the same, progressively undermining the dollar hegemony in international markets and changing the geopolitical environment.
These agreements' timing is also instructive, Beijing is stepping up its attempts to develop economic resilience and strategic autonomy in response to the U.S placing tariffs on Chinese exports and increasing trade tensions, since the energy sector is essential to any nation's economic stability, it makes sense to concentrate on this diversification, Beijing is clearly willing to reassess its international energy alliances in order to protect its interests, as evidenced by its shift away from U.S LNG imports and toward Middle Eastern suppliers like the United Arab Emirates.
These agreements give the UAE the chance to expand its clientele beyond conventional markets and strengthen its commercial connections with the biggest LNG importer in the world, ADNOC is dedicated to enhancing these relationships and taking advantage of rising energy demand of China, as seen by the recent opening of a sales and marketing office in Beijing, the UAE is a desirable partner for China's long-term energy security because of its strategic stance as a reliable provider in a dangerous region.
This change is also indicative of more general patterns in the global LNG market, LNG has become a vital bridge fuel as nations work to achieve climate targets and switch to cleaner energy sources, according to Shell's 2025 LNG Outlook, efforts to cut emissions in industry and transportation, as well as the expansion of the Asian economy, would be major factors in the 60% increase in world demand by 2040, this story fits in well with China's growing LNG imports from the UAE, which put both nations in a position to gain from the changing energy scene.
These LNG agreements between China and the United Arab Emirates are essentially a geopolitical statement and an economic strategy combined and they are about much more than just energy supply, China is fighting the dollar's monopoly and demonstrating its power in the Gulf by securing long-term contracts and trading in yuan, in addition the UAE is expanding its economic alliances and fortifying its relationship with a significant world power by utilizing its energy resources.
These accords are expected to hasten changes in the patterns of international energy commerce and currency usage as they come into force in 2026 and 2028, securing steady LNG supply and advancing the yuan worldwide standing are essential components of Chinese larger goal to alter international economic and geopolitical standards, for the rest of the globe, these events herald a new era in which diplomacy, money and energy are becoming more linked and the dollar long-standing supremacy in international trade faces previously unheard-of difficulties. CHINA-UAE GAS DEAL SIDELINES U.S. — AND THE DOLLAR
This is a calculated attempt by Beijing to lessen its reliance on U.S. energy imports and consequently, on the dollar in global trade. It goes well beyond a simple business deal. The increasing trade battle between the United States and China, which has made importing U.S goods more difficult, is the backdrop for these deals, the cost of LNG is rising for Chinese consumers, compared to prior years, when American LNG made for around 5% of China's total imports, data indicates that China bought zero LNG from the United States in March 2025, China has had to diversify its energy supplies and build closer relationships with other suppliers, such as the UAE, as a result of this change.
The agreements with ADNOC are part of a larger geopolitical landscape in which China is actively pursuing energy supplies from friendly and dependable allies, one of the biggest oil producers in the world and a key actor in the Gulf, the UAE provides China with a dependable supply of LNG that supports long-term energy security objectives of Beijing, the magnitude of this new collaboration is demonstrated by the fact that ENN Natural Gas has inked the largest LNG contract ever between the UAE and a Chinese company, with a 15-year commitment for one million tons per year, in the meantime, this expanding partnership is further cemented by Zhenhua Oil's comparable agreement and CNOOC's five-year contract beginning in 2026 for 500,000 metric tons yearly.
It is also important that some of these transactions were settled in yuan instead of USD, the petrodollar system, which has served as the foundation of international energy trading since the 1970s, is directly challenged by it, China is helping to internationalize the yuan and lessen its exposure to dollar swings and U.S sanctions by conducting energy transactions in its own currency, this could incite other nations to do the same, progressively undermining the dollar hegemony in international markets and changing the geopolitical environment.
These agreements' timing is also instructive, Beijing is stepping up its attempts to develop economic resilience and strategic autonomy in response to the U.S placing tariffs on Chinese exports and increasing trade tensions, since the energy sector is essential to any nation's economic stability, it makes sense to concentrate on this diversification, Beijing is clearly willing to reassess its international energy alliances in order to protect its interests, as evidenced by its shift away from U.S LNG imports and toward Middle Eastern suppliers like the United Arab Emirates.
These agreements give the UAE the chance to expand its clientele beyond conventional markets and strengthen its commercial connections with the biggest LNG importer in the world, ADNOC is dedicated to enhancing these relationships and taking advantage of rising energy demand of China, as seen by the recent opening of a sales and marketing office in Beijing, the UAE is a desirable partner for China's long-term energy security because of its strategic stance as a reliable provider in a dangerous region.
This change is also indicative of more general patterns in the global LNG market, LNG has become a vital bridge fuel as nations work to achieve climate targets and switch to cleaner energy sources, according to Shell's 2025 LNG Outlook, efforts to cut emissions in industry and transportation, as well as the expansion of the Asian economy, would be major factors in the 60% increase in world demand by 2040, this story fits in well with China's growing LNG imports from the UAE, which put both nations in a position to gain from the changing energy scene.
These LNG agreements between China and the United Arab Emirates are essentially a geopolitical statement and an economic strategy combined and they are about much more than just energy supply, China is fighting the dollar's monopoly and demonstrating its power in the Gulf by securing long-term contracts and trading in yuan, in addition the UAE is expanding its economic alliances and fortifying its relationship with a significant world power by utilizing its energy resources.
These accords are expected to hasten changes in the patterns of international energy commerce and currency usage as they come into force in 2026 and 2028, securing steady LNG supply and advancing the yuan worldwide standing are essential components of Chinese larger goal to alter international economic and geopolitical standards, for the rest of the globe, these events herald a new era in which diplomacy, money and energy are becoming more linked and the dollar long-standing supremacy in international trade faces previously unheard-of difficulties. CHINA-UAE GAS DEAL SIDELINES U.S. — AND THE DOLLAR
