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PetroDollar is Dying, Iran is officially Using CNY(Chinese Yuan) to Settle it's Oil

PetroDollar is Dying, Iran is Officially Using CNY (Chinese Yuan) to Settle its Oil.

Deepin Moments:  1-7-2022

China and some countries have already started using CNY (Chinese Yuan)  to settle crude oil transactions, and the volume has been strong with record highs.

Public sources indicate that Chinese buyers purchased Iranian oil last year, with some volumes settled in CNY.

 Now, Iranian authorities have officially replaced the former foreign exchange position of the U.S. dollar with CNY and listed it as one of the country's top three foreign currencies.

In a statement, Iran said the move was made to expand the use of CNY. Considering again, the increased pricing function of CNY crude oil futures in Asian and European markets and the context of expanded trade activities between China and Iran could also provide an alternative oil currency option for traders in oil-producing countries, including Iran.

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This suggests that CNY has begun to play the role of an oil currency instead of the dollar.

 According to the latest forecast of Saxo Bank, Asia should transition a large amount of oil trade to CNY. Currently, oil-producing countries, including Iran, Angola, Indonesia and Venezuela, are very happy to settle their transactions in CNY.

A Chinese oil giant has already signed the first agreement to settle Iranian crude oil imports with CNY purchases, and plans to sign more such contracts in the future, further expanding the scope of settlement of CNY crude oil futures.

The analysis further said that China may also begin a pilot program to settle its crude oil imports in CNY on a large scale. This would mean that the U.S. dollar would not be charged a toll, thus facilitating investors who have a need to bypass the petrodollar and hedge against volatility in the price of dollar-priced crude oil futures.

Combined with the fact that Europe, Japan and Saudi Arabia, which hold the most overseas dollars, are also embarking on de-dollarization, the "oil-dollar-US-debt" system may be on its way out.

 This will mean that more international investors will enter the Shanghai crude oil futures market in the future, supporting China's real economy and adding a new oil currency option for traders in other oil-producing countries.

Analysts say that Chinese energy buyers may next adopt CNY to trade oil on a larger scale, with the Chinese version of CNY crude oil futures breaking the pattern of dollar-based pricing in the oil sector, while a number of oil countries, including the UAE, Japan and India, have previously failed to make a breakthrough in their challenge to the petrodollar, and China has done what others have failed to do.

https://www.youtube.com/watch?v=PNW0v0ppTns

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