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GEAB 148

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Oct 2020

US Tempted by Petroyuan

Remember! Back in 2017 we anticipated that Saudi Arabia would soon be selling its oil in yuan? This was a highly provocative hypothesis at the time, since the country was then one of the two pillars of the petrodollar system.[1] Two years later, it became clear that export flows of Saudi oil were making a radical and dramatic shift from the United States to China.[2] That said, although the attraction of petroyuan is clearly visible,[3] trade is still officially in dollars.[4] Uncle Sam is undoubtedly still watching…

But our team believes that it is time to consider that the very heart of this petrodollar system, namely the United States, which two years ago became the new leading power in world oil,[5] is also falling victim to the ‘temptation of the petroyuan’. We need to take notice of just how important such an event could be.

In fact, for several months now, (so, against the backdrop of the pandemic) Saudi Arabia has seen its exports to China decrease… in favour of the United States! Given the immense economic but above all geopolitical tensions dominating the relationship between the two giants, this ‘detail’ is rather surprising.

Let’s dig into it further…

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