PETRO-DOLLAR vs PETRO-YUAN
In 2018, the 1st yuan-denominated oil futures contract could be reality in China. This possibility is the result of the internationalization of the Yuan and the weakening of the dollar as the world reserve currency. It will totally change the architecture of the world financial market with emergence of the “petro-yuan”. China surpassed the United States as the world biggest importer of crude oil in April 2015 with 7.4 million barrels per day. Chinese import of crude oil is today about 9 million barrels per day. Now Asia is the world center oil consumption. This new dynamic could help China succeed to establish an alternative pricing and trading mechanism for the global oil trade. But, the “petro-yuan” could be only one of the multiple “petro-currencies” that will compete against the petrodollar. Among the future “petro-currencies” we can name the “petro-gold” and “petro-ruble”. Russia would like to create a ruble-based trading and pricing mechanism for its oil exports. The Urals oil futures traded on the Saint-Petersburg International Mercantile Exchange could be the instrument. The Trump administration disengagement from world leadership will help the emergence “petro-yuan”.
In 2018, the 1st yuan-denominated oil futures contract could be reality in China. This possibility is the result of the internationalization of the Yuan and the weakening of the dollar as the world reserve currency. It will totally change the architecture of the world financial market with emergence of the “petro-yuan”. China surpassed the United States as the world biggest importer of crude oil in April 2015 with 7.4 million barrels per day. Chinese import of crude oil is today about 9 million barrels per day. Now Asia is the world center oil consumption. This new dynamic could help China succeed to establish an alternative pricing and trading mechanism for the global oil trade. But, the “petro-yuan” could be only one of the multiple “petro-currencies” that will compete against the petrodollar. Among the future “petro-currencies” we can name the “petro-gold” and “petro-ruble”. Russia would like to create a ruble-based trading and pricing mechanism for its oil exports. The Urals oil futures traded on the Saint-Petersburg International Mercantile Exchange could be the instrument. The Trump administration disengagement from world leadership will help the emergence “petro-yuan”.
