The Saudi Arabian monarchy is reportedly considering ditching the U.S. dollar in exchange for the Chinese yuan, at least when it comes to selling oil to the increasingly influential Chinese.
The Wall Street Journal reports that Saudi Arabia “is in active talks” with the Chinese government to begin selling oil to that country in exchange for Chinese yuan, rather than American dollars, which has long been a world reserve currency and considered married to the dollar.
The report notes that while these discussions have been ongoing for some time, the Saudi desire to ditch the American dollar has “accelerated this year” amid growing dissatisfaction among the monarchy over the country’s relationship with the United States.
The Saudis, according to WSJ, believe that the United States is not doing enough to support its war against Yemen, and is upset that the Biden administration bungled its military withdrawal from Afghanistan, and that the Biden White House has resumed the Obama administration’s efforts to achieve a nuclear deal with Iran.
Regarding Afghanistan, the Saudis were reportedly “shocked” by the withdrawal, which many on the political right believe was mismanaged.
China already buys more than a quarter of Saudi Arabia’s oil exports.
The Saudi interest in the Chinese yuan also comes as OPEC, the cartel of oil producing countries in the Middle East, has repeatedly refused Joe Biden’s requests to increase oil production to help lower prices amid record highs caused by government responses to the COVID-19 pandemic, shutdowns of oil pipelines in North America and Europe, and most recently by the Russian invasion of Ukraine.
Saudi Arabia is an OPEC member, and is one of the largest producers of oil on the planet.
The move also comes as Russia and Belarus pursue an agreement to exchange oil and gas with Russian rubles instead of American dollars, and as India finalizes a new payment system that will allow it to continue trade with Russia despite Western sanctions. India will buy Russian exports in rupees, and sell Indian exports to Russia in exchange for rubles.
This all comes as some pundits in the West have expressed concern about an emerging Sino-Russian alliance that would see two of the world’s largest country develop a sphere of economic and political influence that runs counter to the United States’ national interest.
