SCMP quoted Saudi Arabia's Minister of Industry and Mineral Resources, Mr. Bandar Al-Khorayef, as saying that the country is "open to new ideas" - including the use of the Chinese yuan in oil transactions.
"Nine-yuan oil trading is not a big problem for the Ministry of Industry and Mineral Resources, we believe that Saudi Arabia will do what is best for it, will always try new things and be open to new ideas, we try not to mix politics with trade" - Minister Al-Khorayef said in an interview with SCMP.
The broader application of the yuan in cross-border oil transactions is considered the next step to internationalising the yuan and a challenge for the USD present everywhere in the global commodity market.
The use of the yuan has increased along with trade with Russia - China's largest crude oil importer - after Moscow was excluded from the international payment system in USD due to its military campaign in Ukraine.
Beijing is also expanding the reach of the yuan in international trade in general, signed a 3-year currency swap agreement with Saudi Arabia worth 50 billion yuan ($7.1 billion) in November 2023 and increasingly prioritized domestic currency payments with trading partners.
The popularity of the US dollar in oil trade - known as petrodollar - is a key pillar for the greenback's position as a global reserve currency.
"Our monitoring policy is based on a balanced exchange rate between the Saudi riyal and the USD. This gives us great opportunities to plan and compete, but most importantly, it gives our investors the ability to prevent monetary risks" - Minister Al-Khorayef said.
Saudi Arabia is the world's largest oil exporter and China's second largest crude oil importer - purchases in 2023 decreased by 1.8% compared to the same period to 86 million tons, significantly lower than Russia's 107 million tons.
A report from S&P Global Ratings in August said that strengthening economic relations between China and Saudi Arabia will promote the use of yuan in oil transactions.
Riyadh is seeking to diversify its economy and become an industrial hub in the Middle East under the 2030 Vision initiative and Chinese companies are eagerly exploring alternative markets in Saudi Arabia, thereby promoting closer relations between the two countries.
