A senior Saudi official, Bandar Al-khorayef, indicated that the country is receptive to new ideas, including the use of China’s yuan for crude oil settlements, as Saudi Arabia seeks to diversify its economy and strengthen ties with China, South China Morning Post reported.
Al-khorayef emphasized that Saudi Arabia will prioritize its interests and explore new opportunities, separating politics from commerce. The broader adoption of the “petroyuan” is seen as a significant step in the yuan’s internationalization, challenging the US dollar’s dominance in global commodity markets.
China has been promoting the yuan’s use in international trade, including a currency swap deal with Saudi Arabia and a preference for local currency settlements with trade partners.
The widespread use of the US dollar in oil transactions, generating petrodollars, reinforces its role as the global reserve currency.
Saudi Arabia and China have moved closer in recent years.
Huawei, a leading Chinese telecommunications firm, has made inroads into the Middle Eastern market by establishing a cloud data center and offering automation expertise.
Saudi Arabia’s civil aviation regulator has been discussing potential partnerships with multiple aerospace suppliers, including Chinese companies, to find innovative ways to use their upgraded aluminum in the aviation industry. This includes a recent agreement with a Chinese aircraft manufacturer to localize the aviation industry and strengthen the local supply chain.
