Saudi Arabia, Iran, and Russian oil are all settled in RMB. What does this mean?

As we all know, although some areas in our country are rich in oil resources, they are far from meeting the demand for oil quantity. 20% to 30% are self-produced and sold, and the remaining 70% to 80% can only rely on imports. The major oil-producing countries we know include Saudi Arabia, Iran, and Russia in the Middle East. These countries also use US dollars as their export oil all year round. intermediary currency.

With the development of the economy, the status of the RMB in society continues to rise, and the number of Chinese cars is increasing year by year. The demand for oil has skyrocketed, and the vast market has become the main customer of major foreign oil countries.

Once you use the U.S. dollar, you will be subject to the risk of constant changes in its exchange rate. Therefore, in the recent trade process between major oil countries and China, RMB is used more. Then oil-producing countries such as Saudi Arabia, Iran, and Russia have begun to use RMB for settlement. What does it mean?

1. The beginning of the collapse of the US dollar economic system

1. The domestic economic crisis cannot be resolved

We all know that the United States is a country of immigrants with a diverse population. And it is complicated. A liberal culture has prevailed all year round, advocating democracy and freedom, and emphasizing the importance of human rights. The liberal cultural system makes the United States inconvenient to manage, especially under the epidemic situation. There is an economic crisis within the United States that cannot be resolved for a long time. States are not very cooperative with each other and have separate economic management systems. This has further aggravated the economic contradictions under the epidemic.

2. Random money printing accelerates the collapse

As the most powerful country in the world, the "USD payment system" with the United States as the main body still dominates, which has also caused the United States to In terms of economic system, economic crises are passed on to underdeveloped countries at will.

For example, since the outbreak of the epidemic, the United States has printed banknotes without restraint and failed to follow the laws of market development, resulting in the depreciation of the U.S. dollar and an unstable exchange rate, accelerating the collapse of the economic system.

3. The international status of the U.S. dollar continues to decline

Historically, the Marshall Plan implemented by the United States and the economic system in which the U.S. dollar was linked to gold laid the foundation for the U.S. dollar’s ??international hegemony. Since the 1940s, the process of trade globalization has accelerated, and the US dollar has continued to deepen its position. The completion of the petrodollar system in 1973 marked a new round of improvement in the international status of the dollar.

The fundamental demand for the U.S. dollar has declined as the economic strength of other countries has increased. For example, China's economic strength continues to improve, and it has become the main market for some major oil countries. China is the main trading partner of the major oil countries. The stable and rapid development of China's economic system in recent years has led to an increasing level of trust in the RMB among oil major countries, which has impacted the hegemonic international status of the US dollar to a certain extent.

2. The trend of RMB settlement is expected to become mainstream

1. The economic system is restricted by international relations

In the war between Russia and Ukraine, various countries are vying to take sides. Conflicts between countries bring about changes in the direction of trade and economic policies. For example, Russia is one of the major oil countries and could originally provide oil to many countries in the world. However, due to changes in the international landscape, countries led by the United States will resist the import of Russian oil, and other countries will also change their own oil exports. policy.

The United States is a country with relatively abundant resources. The United States can temporarily not choose to import oil to ensure its self-sufficiency, but this also means that the United States has lost Russia as an oil importing country and lost the opportunity to display US dollars to Russia. status ability. The RMB remains neutral in this environment and is expected to become the mainstream trend in settlement.

2. The convenience of RMB settlement is obvious

Our country has painstakingly specialized in settlement methods. For example, within just ten years, banks The mainstream of card payment and cash payment has changed to electronic payment. The wide range of electronic payment uses and the number of users are unmatched in the world. This shortens people's payment time, speeds up transactions, and promotes the formation of a market-oriented and modern life style.

According to data released by the Society for Worldwide Interbank Financial Telecommunication in February 2022, the proportion of RMB in global payments has further increased. China adheres to the principle of peaceful economic coexistence with other countries and follows the basic belief of friendly cooperation and mutual exchanges. Continuously explore the convenience of payment methods to increase the international usage of RMB, so that RMB settlement methods can be used more and more widely internationally.

3. The RMB system is more friendly and stable

Our country’s diplomatic principles determine that our country’s RMB system is more friendly and stable. This is contrary to the economic sanctions imposed by the United States on some countries at different times. For example, Saudi Arabia, as one of the pro-American countries, has never dared to have a more independent direction of economic development and needs to constantly avoid conflicts and economic sanctions from the United States.

The use of RMB can better safeguard the country’s development interests. Our country’s economic system pursues a policy of non-intervention in conflicts of other countries, which means that it is impossible to arbitrarily impose economic sanctions on other countries.

For example, in recent years, our country has provided large-scale economic support to neighboring developing countries such as Africa and Vietnam. In the process of trade with Vietnam, the proportion of RMB is also expanding year by year, effectively maintaining equal cooperation between both parties. The friendly and stable RMB system is also one of the reasons why it is becoming more and more popular internationally.

3. Globalization promotes the use of currency

1. The market brings opportunities for RMB settlement

Fundamentally speaking, Saudi Arabia, Iran, and Russia The recent use of RMB by oil-producing countries depends on the vast market. Only with the continuous enhancement of China's own economic strength can the demand for oil continue to increase, and only then can the RMB have the opportunity to shine in the international market. Expanding market demand is an important means to consolidate RMB settlement.

2. RMB settlement needs openness and interoperability

An open and interoperable environment is one of the conditions for RMB to be recognized internationally. The development of the socialist economy still adheres to openness and interoperability in the current relatively complex international environment, and it is very rare to expand the content of interoperability. Although my country still relies on imports of oil, its policies for foreign interconnection countries and regions have reached a relatively mature level, which also provides the possibility for the sublimation of RMB settlement methods.

Summary:

Iran, Russia and other oil-producing countries use RMB for settlement, which is the best choice under the special international environment. It also verifies that our country has The growing economic strength and unique strategic vision in international relations. We must have full confidence in our country's economic system and persist in an economic system that is open, inclusive, and peacefully coexisting.

We must be deeply aware that the use of RMB for settlement by oil major countries is fundamentally based on the vast market demand of our country. Therefore, we must be prepared for danger in times of peace, grasp the fundamental demand attributes, and strive to achieve a higher international status in RMB settlement in the future. One floor.

What do you think about Iran, Russia and other oil-producing countries using RMB for settlement?