On the afternoon of 9th, at the first China-Gulf Cooperation Council Summit, this heavy news was officially finalized. China announced that it will continue to import crude oil and liquefied natural gas from GCC countries in the next three to five years, strengthen oil and gas development and clean and low-carbon energy technology cooperation, and carry out RMB settlement of oil and gas trade.
As an important member of the "Petrodollar" system, why did Arab countries join the "circle of friends of RMB"? What far-reaching impact will this have on the international crude oil market?
Tear a hole
Why can "petroleum RMB settlement" attract market attention? To answer this question, we must first understand the "petrodollar system" that has occupied the international market for 50 years.
After the two world wars, the United States dominated the "Bretton Woods system" in which the dollar was linked to gold. Since the 1970s, the world economic crisis has appeared constantly, the dollar has depreciated sharply, and the trade deficit cannot accept enough gold. 197 1 Nixon announced that the dollar was decoupled from gold and voluntarily ended the gold standard. However, the United States once again found a substitute for gold-oil, and finally reached an agreement with major oil-producing countries to link the US dollar with crude oil trade, and the US dollar became the currency for international crude oil pricing and settlement. "Whoever controls the oil will control all countries. Whoever controls the currency will control the global economy. " This sentence has also become a classic quotation in economics.
At present, the RMB has torn a hole in the almost impenetrable "petrodollar system". Although the official has not announced the specific details and order of RMB settlement, it can be expected that in the future, more countries will choose RMB to settle their trade with China, especially commodity trade, and the dominance of the US dollar in global trade will also be challenged.
The good news had some repercussions in the market. In response to investors' questions, Shen Kai shares clearly stated: "Local currency settlement can reduce the risk of exchange rate fluctuations and help the company expand overseas markets." However, some enterprises said that the strong correlation between oil and the US dollar will exist for a long time, and the US dollar is still the main settlement currency for international crude oil transactions. A person in charge of an international crude oil trader told reporters: "Crude oil trading is mainly controlled by European and American energy companies, and RMB settlement needs to change this game rule and require long-term efforts."
The rift of "strategic allies"
Since 1945, the relationship between the United States and Saudi Arabia has been an important pillar of American Middle East policy. However, in recent years, the "strategic ally" relationship between the two countries has been affected by the Kaczynski incident and is in a delicate stage of so-called "recalibration".
In addition to political factors, economic conflicts have also become a problem that Saudi Arabia has to consider. With the major breakthrough of shale oil technology in the United States, 20 123 15000 barrels of crude oil are produced in the United States every day, and it is predicted that us energy information administration's crude oil output will reach 1234 million barrels per day next year. At the same time, shale oil exploitation will also produce a large amount of natural gas. The export of crude oil and natural gas in the United States directly competes with the OPEC group headed by Saudi Arabia, so it is obviously more necessary to consider the dollar settlement factor.
In recent years, the economic exchanges between China and Saudi Arabia have steadily warmed up. According to customs data, in 20021year, Saudi Arabia was the largest supplier of crude oil to China, and 25% of the oil exported by Saudi Arabia entered the China market. At the same time, China has become the largest trading partner and the largest foreign investor in Arab countries. In 20021year, the bilateral trade volume between China and Arab countries reached more than 330 billion US dollars, which was 10.5 times higher than that before 10, and the stock of two-way direct investment reached 27 billion US dollars, which was 2.6 times higher than that before10. In the first three quarters of 2022, the bilateral trade volume between China and Arab countries reached 319.295 billion US dollars, up 35.28% year-on-year, close to the annual level of 202 1.
It can be seen that China's demand for crude oil is still strong, and the settlement of oil trade with China in RMB will help to expand the scale of oil trade with China. In addition, Saudi Arabia's increase of RMB as the currency for oil trading is also one of the measures to optimize the asset structure of foreign exchange reserves in order to get rid of the situation of over-reliance on dollar-denominated trade.
Accelerate "de-dollarization"
In fact, "RMB settlement of oil transactions" is not a new topic. Some media disclosed that as early as 20 16, when the Saudi Crown Prince visited China for the first time, the two countries started relevant negotiations, and related topics once again attracted the attention of the international market in March this year.
In April this year, Russian Deputy Prime Minister Novak said that an agreement to sell Russian oil and coal in RMB has been reached, and the Russian Ministry of Finance and the Central Bank are refining the plan. 165438+ 10 In June, some Russian enterprises began to settle fertilizer with Brazil in RMB, and said that RMB has the best liquidity and developing countries are willing to pay in RMB.
RMB settlement is only the tip of the iceberg of dollarization in various countries. After the conflict between Russia and Ukraine, many countries realized that the dollar-based oil pricing and settlement system was extremely risky and tried to get rid of the dominant position of the dollar.
Russia took the lead in announcing that natural gas was settled in rubles, which started the first shot to get rid of the dollar. Since then, India has introduced the rupee settlement mechanism, and Iran has also indicated that it will no longer use US dollars for trade settlement with Russia. Among Iran's major foreign exchange currencies, RMB and Euro rank first. Since 2020, Saudi Arabia has continuously reduced its holdings of US debt, and the balance of US debt has dropped by more than 30%.
This year, Israel will include Canadian dollars, Australian dollars, Japanese yen and RMB in its foreign exchange reserves for the first time, and will reduce its holdings of US dollars and euros to diversify its foreign exchange reserves. According to the report of Brazil's central bank, in the past year, the proportion of US dollar in Brazil's foreign exchange reserves dropped from 86.03% to 80.34%, the proportion of Euro dropped from 7.85% to 5.04%, and the proportion of RMB rose from 1.2 1% to 4.99%, making it the third largest foreign exchange asset.
It can be expected that with the improvement of RMB cross-border settlement facilities, the proportion of RMB global payment will also usher in greater improvement.