According to the data provided to the BWC Chinese Network Headline Reporter a week ago, the cumulative trading volume of China's crude oil futures in 2021 was 42.6452 million lots, an increase of 2.55% year-on-year, and the cumulative turnover was 18.5 trillion yuan, an increase of 54.63% year-on-year, while since the listing in 2018, the cumulative trading volume exceeded 160 million lots, the transaction amount exceeded 60 trillion yuan, and the cumulative delivery was 135 million barrels.
As of January this year, 68 international brokerage companies have launched RMB crude oil trading services, attracting market participants from 25 countries and regions, including the United Kingdom, Switzerland, the United Arab Emirates, etc., forming a global 24-hour continuous trading range with New York and London in the trading time zone, and all Chinese traders and large oil companies have shifted from New York and London Exchange to Shanghai. For example, a large number of Shanghai crude oil futures are currently entering the Japanese and South Korean markets in the form of re-exports, which indicates that the renminbi is increasingly influential in the Asian crude oil market.
As of the end of December, there were 75 overseas intermediaries registered in the Shanghai International Energy Exchange Center, and overseas customers were distributed in more than 20 countries and regions in Asia, Africa, Europe, North America, South America and Oceania, which is considered to be the "most important kilometer" of the RMB stage of China Liangjian Petroleum, you know, more and more international participants are trading as a link between the RMB crude oil futures market and the international spot market, and it is also a concrete embodiment of the function of the RMB pricing futures market, which will mean that In the future, more international institutional investors will enter the Shanghai crude oil futures market.
For example, a senior U.S. crude oil futures trading investor told us earlier that since the listing of renminbi crude oil futures for three years, the renminbi is expanding its pricing power for Eurasian crude oil, and whether a new oil currency system has the active participation of foreign investors reflects pricing power. And now, according to the US financial website Zerohedge, more and more traces now suggest that the world's petrodollar may no longer be so important for all oil-exporting companies.
The new news shows that at present, Chinese customers have begun to partially use RMB settlement when trading crude oil with some countries, and the trading volume performance is strong, for example, in recent months, a number of private refineries have purchased more than 10 million barrels of crude oil through RMB crude oil futures, and even a large number of Shanghai crude oil futures have entered the Japanese and South Korean markets in the form of re-export, which shows that the influence of the RMB on the Asian crude oil market is increasing.
An oil tanker at the crude oil terminal in Zhoushan
According to data released by the General Administration of Customs on January 20, china imported 260,312 tons of crude oil from Iran in December last year, and according to the comprehensive data monitored by Reuters, Iran has shipped about 20 million tons of oil to the Chinese market in the past 24 months, with a record volume of trading, and most of the transactions are carried out in yuan or euros, which shows that the renminbi has played the role of oil currency.
On January 15, BWC Chinese network reporters surveyed some U.S. crude oil futures trading investors through email, showing that they said that after the pricing function of RMB crude oil in the Asian market appeared, this trend was more obvious, the price fluctuations and trading volume of the market were driven, and the most direct performance was that U.S. traders finally began to frequently focus on the night market of RMB crude oil futures.
And this most vivid footnote, more means that the renminbi is expanding the pricing power of Eurasian crude oil, but also means that there will be more international investment in China's real economy, you know, before the Shanghai crude oil futures contract was not listed, the international trading volume in the previous Asian session was very light, and the price fluctuations were extremely small, at the same time, China is also steadily promoting exchange rate reform and a wider range of financial market opening.
The new development is that the relevant Chinese institutions have expressed support for Shanghai to take the lead in the free use of the renminbi, and the time is ripe for the adoption of the digital yuan in China's commodity retail and futures markets, for example, in August last year, the digital yuan has begun to be used in the Transaction of the Dalian Commodity Exchange (DCE), and the trader can use the digital yuan to pay storage fees to the delivery warehouse, providing an efficient, zero-cost and safe oil trading currency option for future exchanges and participants.
According to Saxo Bank's latest forecast, at present, many oil-producing countries are already very willing to settle transactions in the form of RMB. For example, investors in markets such as Russia, Angola and Iran may use yuan for transactions, and according to Reuters, a Chinese oil giant has signed the first yuan-denominated Middle East crude oil import agreement, which is said to come from Iran, and plans to sign more such contracts in the future, and China is expected to take measures to pay for imported crude oil in yuan and expand the pilot program.
The photo shows the Iranian tanker huge
This means that the newly born oil yuan can also provide oil producers with another oil currency option when trading oil, thus facilitating investors who have a need to bypass the petrodollar, and if Saudi Arabia also decides to sell oil to the Chinese market in renminbi instead of dollars, then this situation will change the global crude oil market.
For example, for oil producers, they do not need to reduce a large amount of dollar reserves to buy oil, for example, the root cause of the recent financial shock in some markets is that the dollar liquidity will become tight, and at the same time, they do not need to pay the dollar exchange rate difference to buy oil.
This also means that the oil yuan creates a dollar-free trading environment for these countries or crude oil traders, and can provide them with another oil currency option when trading oil, which will also lead to a sharp decline in dollar demand and may bring immeasurable consequences to the petrodollar system, in other words, the newly born oil yuan may establish a new post-Bretton Woods system of world economic order.
In this regard, the Nikkei Asia Review also said a few weeks ago that Asian countries are best to transition the energy trade such as crude oil to the renminbi and the yen, and the rising presence of renminbi crude oil in the world means that another oil currency star is rising, and then Reuters is more bluntly saying that before, whether it is Russia or Dubai, the challenge to the petrodollar has failed, but China's crude oil futures have successfully done what others have tried in vain so far. Of course, the petrodollar will not lose its dominance immediately, it will be a slow process.
Of course, we must also be soberly aware that although oil countries, including Saudi Arabia, Russia and Iran, once declared or will reduce the use of petrodollars, the main benchmark of global crude oil futures is still denominated in US dollars, and for traders, which oil currency to choose is more determined by the market. Because, for oil-producing countries, choosing which oil currency to trade is not a zero-sum game, but for the oil yuan, which has only been born for more than three years, it has a long way to go and forge ahead. (End)