Zero Hedge — In Unprecedented Move, China To Pay For Oil Imports With Yuan Instead Of Dollars

Just days after Beijing officially launched Yuan-denominated crude oil futures (with a bang, as shown in the chart below, surpassing Brent trading volume) which are expected to quickly become the third global price benchmark along Brent and WTI, China took the next major step in the internationalization of the Yuan, challenging the Dollar's supremacy as global reserve currency, when on Thursday Reuters reported that China took the first steps to paying for crude oil imports in its own currency instead of the US Dollars.

Zero Hedge
In Unprecedented Move, China To Pay For Oil Imports With Yuan Instead Of Dollars

Tyler Durden

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Pepe Escobar — China taking the long road to solve the petro-yuan puzzle

Does the launch of the petro-yuan represent the ultimate deathblow to the petrodollar – and the birth of a completely new set of rules? Not so fast. That may take years, and depends on many variables, the most important of which will be China’s capacity to bend, tweak and ultimately rule the global oil market.

As the yuan progressively reaches full consolidation in trade settlement, the petro-yuan threat to the US dollar, inscribed in a complex, long-term process, will disseminate the Holy Grail: crude oil futures contracts priced in yuan fully convertible into gold.

That means China’s vast array of trade partners will be able to convert yuan into gold without having to keep funds in Chinese assets or turn them into US dollars. Exporters facing the wrath of Washington, such as Russia, Iran or Venezuela, may then avoid US sanctions by trading oil in yuan convertible to gold. Iran and Venezuela, for instance, would have no problems redirecting tankers to China in order to sell directly in the Chinese market – if that’s what it takes….

While the economic significance of this portends to be considerable, it is dwarfed by the geopolitical significance. Beijing just poked Washington in the eye.

Asia Times
China taking the long road to solve the petro-yuan puzzle

Pepe Escobar

Jillian Ambrose — China to launch rival oil futures market in spring

 It's on.

China will soon be able to trade oil using its own currency by creating a futures market to rival the international benchmark contracts which are traded exclusively in dollars. 

The China Securities Regulatory Commission confirmed its plans to begin the trade of yuan-based oil futures on the Shanghai Futures Exchange from March 26 on Friday. 

China is now the world’s largest crude importer which is understood to be a large part of its drive to establish a benchmark which reflects its local market and offers its mega refineries more clout....

The Telegraph
China to launch rival oil futures market in spring
Jillian Ambrose, energy editor

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Long-anticipated move hopes to chip away at dollar’s grip on global markets

Asia Times
Yuan-denominated crude futures launch finally announced