These countries account for more than 25% of the world's oil exports, with Saudi Arabia alone contributing around 17%. In addition, more than 25% of China's oil imports come from Saudi Arabia.
"China will continue to import large quantities of crude oil from GCC countries, expand imports of liquefied natural gas, strengthen cooperation in upstream oil and gas development, engineering services, storage, transportation and refining, and make full use of the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trade."
The contract is based on Brent crude oil, the global benchmark for oil prices, and is settled in cash.
The INE yuan oil futures contract provides a new pricing benchmark for the global oil market, which the US dollar has traditionally dominated.
Its significance lies in its potential to shift the balance of power in the oil market away from the US and towards China and to increase the use of the Chinese yuan in global trade.
For nearly 50 years, the Saudis had always insisted anyone wanting their oil would need to pay with US dollars, upholding their end of the petrodollar system.
Saudi Arabia-the linchpin of the petrodollar system-is openly agreeing not to sell its oil exclusively in US dollars.
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