China's RMB overtakes euro in Middle East crude-oil trade
Updated
Updated · CounterPunch · May 7
China's RMB overtakes euro in Middle East crude-oil trade
5 articles · Updated · CounterPunch · May 7
In March, renminbi settlement exceeded 41% of China's regional crude trade, trailing only the dollar as oil prices topped $119 a barrel amid Strait of Hormuz disruption.
The report says the shift cushions sanctions and dollar volatility, while Panda bonds, currency swaps and rising Middle Eastern sovereign wealth fund investment strengthen China's role as a regional liquidity provider.
It argues conflict-driven shipping and energy shocks are also boosting China's manufacturing, renewable exports and overland Belt and Road rail links as alternative stabilisers for global trade.
Is China's economic stability a global public good or a strategic move to cement its dominance?
Will China’s land-based BRI permanently replace vulnerable sea lanes as the world’s primary trade artery?
How will global firms navigate the clash between Western sanctions and China's new security laws?
De-Dollarization Accelerates as RMB Captures 41% of Middle East Oil Payments
Overview
In March 2026, the Chinese Renminbi (RMB) overtook the euro as the second most used currency for Middle East-China oil settlements, while the US dollar's share dropped significantly. This shift was driven by the US-Iran war, which led Iran to impose yuan-denominated tolls on vessels passing through the Strait of Hormuz and deepen its reliance on China for oil trade. Alongside, Gulf states diversified their financial strategies amid rising geopolitical risks. China's expansion of payment systems, digital yuan promotion, and currency swap agreements further supported RMB adoption. Despite these gains, structural barriers and the enduring strength of the dollar suggest a gradual move toward a multipolar currency system rather than a sudden RMB dominance.