On May 14, Reuters reported that Washington’s decision to re-impose sanctions on Iran had bolstered investor interest in trading crude in yuan instead of US dollars.
However, the launch of the first-ever yuan-denominated oil futures on the Shanghai International Energy Exchange by China on March 26 and the global role of euro could serve as a game changer upsetting Trump’s plan.On May 14, Reuters reported that Washington’s decision to re-impose sanctions on Iran had bolstered investor interest in trading crude in yuan instead of US dollars. As a result, Shanghai crude oil futures ISCc1 have seen a steady rise in trading reaching a record 250,000 lots on May 9, a day after Trump’s pullout from the JCPOA.
The crux of the matter is that the yuan-denominated transactions are non-transparent for US financial regulators, the economist pointed out, assuming that Chinese and European consumers could use Shanghai as a “black box” to evade US sanctions while buying Iranian crude.
According to Irina Fyodorova, a senior researcher at the Institute of Oriental Studies of the Russian Academy of Sciences (RAS), China has experience circumventing…
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