Recent remarks by a senior Saudi official that the Kingdom may be receptive to using Chinese currency for crude oil has raised the prospect of increasing non-dollar oil trade, MEES said.

• Saudi Arabia has not said publicly whether it has already sold any crude oil to China in renminbi. However, that cannot be discounted as Riyadh and Beijing penned a 3-year currency swap deal.
• In March 2023, the UAE sold its first LNG cargo to China in renminbi.
• China is the world’s largest crude oil importer and sources large proportions of its crude from the Middle East.
• With Saudi Arabia’s moving from first to second place in terms of China’s top suppliers, losing out to Russia, it may benefit the Kingdom to make concessions to China, MEES added.
• However, Saudi’s currency remains pegged to the dollar, which would expose the Kingdom to foreign exchange risk.