France bows to China: pays for natural gas in Yuan. End of the Dollar?
China just completed the first exchange of liquefied natural gas (LNG) settled in yuan, the Shanghai Petroleum and Natural Gas Exchange said on Tuesday . Chinese state-owned oil and gas giant CNOOC and TotalEnergies have completed the first LNG trade on the Chinese-currency-settled exchange, the exchange said in a statement reported by Reuters.
The deal involved about 65,000 tonnes of LNG imported from the UAE, the Shanghai Petroleum and Natural Gas Exchange added.
The French multinational, one of the world's leading LNG traders, confirmed to Reuters that the trade involved LNG imported from the UAE, but declined to comment further on the deal.
For years, China has been trying to conclude more trade deals in yuan to increase the relevance of petroyuan (or LNG-yuan, as the case may be) in global markets and challenge the dominance of the US dollar in international trade, including energetic. During a historic visit to Riyadh in December, Chinese President Xi Jinping said China and Gulf Arab nations should use the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trades.
“ China will continue to import large quantities of crude oil from GCC countries, expand imports of liquefied natural gas, strengthen cooperation in oil and gas upstream development, engineering services, storage, transportation and refining, and will make full use of the Shanghai Oil and Gas Exchange as a platform to carry out yuan settlement of oil and gas trades ,” Xi said in December, as reported by Reuters.
France bought 65,000 tons of LNG using the Chinese yuan
The liquified natural gas was bought from the UAE, the payment is settled in the Shanghai Petroleum and Natural Gas Exchange, using Chinese yuan
We are witnessing the end of the US dollar hegemony. pic.twitter.com/GfX17nKxA1
— Zhao DaShuai 无条件爱国
(@zhao_dashuai) March 29, 2023
However, Beijing still has a long way to go before dethroning the greenback as a global reserve: although the Chinese currency has made inroads in world trade, the yuan accounts for just 2.7% of the market, compared to 41% for the US dollar.
On the other hand, the Chinese currency has a lot of momentum: in the last year, Russia has turned to trade in yuan in the wake of Western sanctions on its energy exports, imports and trade, as the Chinese currency has become the only Putin's alternative to reduce exposure to the US dollar and the euro. At the same time, the fact that France agrees to pay in Yuan is a sign that Europe too is bowing to Beijing's wishes, in order to have natural gas.
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The article France bows to China: it pays for natural gas in Yuan. End of the Dollar? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-francia-si-piega-alla-cina-paga-il-gas-naturale-in-yuan-fine-del-dollaro/ on Thu, 30 Mar 2023 12:41:55 +0000.