Saudi Arabia is reportedly considering accepting the Chinese yuan instead of the dollar in oil sales to China, according to the Wall Street Journal (WSJ)

Informed sources told the newspaper that Saudi Arabia is “in active talks with Beijing to price some of its oil sales to China in yuan,” a move that would reduce the dollar's dominance over the global oil market and represent another shift by the world's largest crude exporter to Asia.

WSJ reported that “talks between Riyadh and Beijing have accelerated as the Saudi unhappiness grows with Washington.”

The Wall Street Journal quoted informed sources as saying that talks with China over oil contracts priced in yuan have stopped six years ago, but renewed this year as the Saudis became increasingly unhappy with US security commitments to defend the Saudi kingdom.

According to the Wall Street Journal report, Saudi Arabia is looking to obtain support from the United States over its intervention in Yemen.

Saudi Arabia is the largest exporter of oil to China, and data showed that the Kingdom maintained its rank as the largest exporter of crude oil to China in 2021, as supplies increased by 3.1 percent compared to 2020.

Notably, China buys more than 25 percent of Saudi Arabia’s oil exports, and if it is priced in yuan, these sales will revive the Chinese currency’s rank globally.

It is expected that the pricing of a small part of the Kingdom’s exports amounting to about 6.2 million barrels per day in any currency other than the dollar will cause a great change.

The dollar is prominent in 80 percent of global oil sales, and the kingdom has specified the dollar for oil sales since 1974, in an agreement during the administration of President Richard Nixon, which in turn included security guarantees for the kingdom.