Russia Coal and Oil Paid for in Yuan Starts Heading to China
Coal cargoes to arrive this month, followed by crude in May
China has long bristled at dollar’s dominance in global trade
Bloomberg News
7 April 2022, 12:32 GMT+8Updated on7 April 2022, 16:55 GMT+8
Listen to this article
2:50
Share this article
In this article
XW1
Generic 1st 'XW' Future
289.35USD/MT+9.35+3.34%
CNY
China Renminbi Spot
6.3625CNY+0.0027+0.0425%
CL1
WTI Crude
97.33USD/bbl.+1.10+1.14%
0675232D
SERVICE CO/THE
Private Company
Open
Russian coal and oil paid for in yuan is about to start flowing into China as the two countries try to maintain their energy trade in the face of growing international outrage over the invasion of Ukraine.
Several Chinese firms used local currency to buy Russian coal in March, and the first cargoes will arrive this month, Chinese consultancy Fenwei Energy Information Service Co. said. These will be the first commodity shipments paid for in yuan since the U.S. and Europe penalized Russia and cut several of its banks off from the international financial system, according to traders.
Sellers of Russian crude have also offered to give buyers in Asia’s largest economy the flexibility to pay in yuan. The first cargoes of the ESPO grade bought with the Chinese currency will be delivered to independent refiners in May, according to people familiar with the purchases.
China has long bristled at the dollar’s dominance in global trade and the political leverage it gives the U.S. Efforts to chip away at the status quo are now being accelerated by Western steps to punish Russia for its war of aggression. Moscow is offering rupee-ruble payments to Indian oil buyers, while Saudi Arabia is in talks with Beijing to price some of its crude in yuan.
See also: Saudi’s Oil-For-Yuan Bid Won’t Hurt the Dollar: David Fickling