DUBAI (Dispatches) – Chinese leader Xi Jinping has vowed to import more oil and natural gas from energy-rich Persian Gulf Arab states while not interfering in their affairs, likely seeking to cast Beijing in a more favorable light than Washington as America’s attention in the region wanes.
Xi also urged the Arab countries to conduct energy sales in the Chinese yuan, potentially divorcing the U.S. dollar from transactions in a region where the United States still stations thousands of troops across a network of local bases.
China’s hands-off approach could appeal to leaders such as Saudi Crown Prince Mohammed bin Salman, who stands ready to rule the oil-rich kingdom for possibly decades, even after facing widespread international criticism over the killing of Washington Post columnist Jamal Khashoggi and the still-raging war in Yemen.
During Xi’s visit to Saudi Arabia this week, the prince himself welcomed him to a meeting of the clubby Persian Gulf Cooperation Council, and later to a wider summit of Mideast leaders.
Any move by Saudi Arabia to ditch the dollar in its oil trade would be a seismic political move, which Riyadh had previously threatened in the face of possible U.S. legislation exposing OPEC members to antitrust lawsuits.
China’s growing influence in the Persian Gulf has unnerved the United States. Deepening economic ties were touted during Xi’s visit, where he was greeted with pomp and ceremony and on Friday met with Persian Gulf states and attended a wider summit with leaders of Arab League countries spanning the Persian Gulf, Levant and Africa.
In March, the Wall Street Journal reported that Saudi Arabia was considering replacing the U.S. dollar in favor of yuan in its oil sales to China.
An American senator then warned that China and Saudi Arabia’s potential ditching of the dollar in their bilateral oil trade could indicate a global shift away from the United States.
“Just this point of the Saudis pricing some of their commodity in Chinese currency or signaling that that’s where they’re headed, that is a big, bad thing,” Ben Sasse told the Fox News.
A move to conduct oil transactions with China in yuan would mark a substantial shift for the oil market, where 80 percent of sales are conducted in dollars.