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DUBAI – United Arab Emirates part of historic deal for Chinese national energy trade platform of the week.
what happened: China carried out the first-ever energy transaction settled in yuan, involving about 65,000 tonnes of UAE liquefied natural gas (LNG). The deal was carried out by China National Offshore Oil Corporation and France’s TotalEnergies through the Shanghai Petroleum and Natural Gas Exchange, the exchange reported on Tuesday.
total energy told Reuters the deal involved imports of liquefied natural gas from the United Arab Emirates, but declined further comment.
Why it matters: China has repeatedly negotiated with countries in the Middle East and North Africa to conduct trade in their own currencies.
Last month, the Central Bank of Iraq said it would conduct Trade with China Yuan. That’s partly due to the country’s dollar shortage as it faces restrictions from the U.S. Federal Reserve, which seeks to prevent dollar transfers to sanctioned Iran.
In January, Saudi Finance Minister Mohammed Al-Jadaan told Bloomberg in an interview at the World Economic Forum in Davos that the kingdom was open to trading in currencies other than the dollar to “improve trade.” This echoed his comments last year that the kingdom was considering pricing oil sales to China in yuan.
Egypt announced plans to issue bonds in renminbi in August 2022. Israel added the yuan to its foreign exchange reserves in April last year, along with the Canadian and Australian dollars.
learn more: During a visit to Saudi Arabia in December, Chinese President Xi Jinping called on the Gulf countries to use the Shanghai Oil and Gas Exchange to develop energy trading Yuan.
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