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On May 6th, Pakistani media reported that the country may use Chinese yuan to pay for the crude oil imported from Russia, and the first shipment of 750,000 barrels is expected to arrive in June. An anonymous official from Pakistan’s Ministry of Energy stated that the transaction will be supported by the Bank of China. However, the official did not provide any details about the payment method or the exact discount that Pakistan will receive, citing that such information is not in the interest of both parties. The Pakistan Refinery Limited will be the first refinery to process Russian crude oil, and other refineries will join in after trial runs. It is reported that Pakistan has agreed to pay $50-$52 per barrel of oil, while the Group of Seven (G7) has set a price ceiling of $60 per barrel for Russian oil.

According to reports, in December of last year, the European Union, G7, and its allies imposed a collective ban on the export of Russian seaborne oil, setting a price ceiling of $60 per barrel. In January of this year, Moscow and Islamabad reached a “conceptual” agreement on Russian oil and oil product supplies to Pakistan, which is expected to provide assistance to the cash-strapped country facing an international payment crisis and extremely low foreign exchange reserves.

India and Russia suspend rupee settlement negotiations as Russia wants to use yuan

On May 4th, Reuters reported that Russia and India have suspended negotiations on settling bilateral trade in rupees, and Russia believes that holding rupees is not profitable and hopes to use the Chinese yuan or other currencies for payment. This would be a major setback for India, which imports a large amount of low-priced oil and coal from Russia. Over the past few months, India has been hoping to establish a permanent rupee payment mechanism with Russia to help reduce currency exchange costs. According to an anonymous Indian government official, Moscow believes that a rupee settlement mechanism will eventually face an annual surplus of over $40 billion, and holding such a large amount of rupees is “not desirable.”

Another Indian government official participating in the discussions revealed that Russia does not want to hold rupees and hopes to settle bilateral trade in yuan or other currencies. According to an Indian government official, as of April 5th of this year, India’s imports from Russia had risen from $10.6 billion in the same period last year to $51.3 billion. Discounted oil from Russia accounts for a large portion of India’s imports and increased 12 times after the conflict erupted in February of last year, while India’s exports fell slightly from $3.61 billion in the same period last year to $3.43 billion.

Most of these trades are settled in US dollars, but an increasing number of them are being settled in other currencies, such as the United Arab Emirates dirham. In addition, Indian traders are currently settling some of the Russian-Indian trade payments outside of Russia, and the third party can use the payment received to settle transactions with Russia or offset it.

According to a report on Bloomberg’s website, on May 5th, Russian Foreign Minister Lavrov said in reference to the expanding trade surplus with India that Russia had accumulated billions of rupees in Indian banks but could not spend them.

Syrian President supports using yuan for settling international trade

On April 29th, China’s Special Envoy for the Middle East Issue, Zhai Jun, visited Syria and was received by Syrian President Bashar al-Assad at the People’s Palace in Damascus. According to the Syrian Arab News Agency (SANA), al-Assad and the Chinese representative discussed the consensus between the two sides on Syria-China bilateral relations against the backdrop of China’s important role in the region.

Al-Assad praised China’s mediation

efforts to improve the Shaiqi relations, saying that “confrontation” first appeared in the economic field, making it increasingly necessary to depart from the US dollar in transactions. He suggested that the BRICS countries can take a leadership role in this issue, and countries can choose to settle their trade in Chinese yuan.

On May 7th, the Arab League held an emergency meeting of foreign ministers in the Egyptian capital, Cairo, and agreed to restore Syria’s membership in the Arab League. The decision means that Syria can immediately participate in Arab League meetings. The Arab League also emphasized the need to take “effective steps” to resolve the Syrian crisis.

According to previous reports, after the 2011 Syrian crisis erupted, the Arab League suspended Syria’s membership, and many countries in the Middle East closed their embassies in Syria. In recent years, regional countries have gradually sought to normalize their relations with Syria. Countries such as the United Arab Emirates, Egypt, and Lebanon have called for Syria’s membership to be restored, and many countries have reopened their embassies in Syria or border crossings with Syria.

Egypt considers using local currency to settle trade with China

On April 29th, Reuters reported that Egypt’s Minister of Supply Ali Moselhy said that Egypt is considering using local currencies of its commodity trading partners such as China, India, and Russia to reduce its demand for the US dollar.

“We are very, very, very strongly considering trying to import from other countries and approve the local currency and the Egyptian pound,” Moselhy said. “This hasn’t happened yet, but it’s a long journey, and we’ve made progress, whether it’s with China, India, or Russia, but we haven’t reached any agreements yet.”

In recent months, as global oil traders seek to pay with currencies other than the US dollar, the US dollar’s dominant position of several decades has been challenged. This shift has been driven by Western sanctions against Russia and a shortage of US dollars in countries such as Egypt.

As one of the largest buyers of basic commodities, Egypt has been hit by a foreign exchange crisis, leading to a nearly 50% drop in the exchange rate of the Egyptian pound against the US dollar, which has limited imports and pushed Egypt’s overall inflation rate to 32.7% in March, close to a historical high.