China-Russia energy deals now settled in yuan, ruble: official

Energy trading between China and Russia has been settled in both the yuan and the ruble, Russian Deputy Prime Minister Alexander Novak said in interview with Russian media over the weekend, according to a report by China's state broadcaster CCTV.

Trades using the yuan, the ruble and the Turkish lira are increasing and becoming common, while deals using the US dollar or the euro are trending down, Novak said.

Moscow intends to abandon the use of the US dollar and the euro in energy transactions, while using the local currencies of relevant countries, Novak said.

The promotion of energy settlements in their own currencies will facilitate China-Russia trade as energy remains a major stabilizer in bilateral ties, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Sunday.

China's commerce with Russia maintained its strong growth momentum in the first quarter this year. Bilateral trade totaled $53.85 billion, up 38.7 percent from a year earlier, far outpacing the growth of China's total foreign trade, data from China's General Administration of Customs showed.

China and Russia have moved to strengthen their energy and financial cooperation and made solid progress in strategic projects.

In September, Russian energy giant Gazprom said that it had signed an agreement to start switching payments for gas supplies to China to the yuan and the ruble, instead of the US dollar, Reuters reported.

Gazprom CEO Alexei Miller said that the new payment mechanism is a "mutually beneficial, timely, reliable and practical decision" and will "make settlements easier, serve as a great example to other companies, and give a new impetus to our economies," read a statement on the website of Gazprom.

"China-Russia energy cooperation has great potential as complementarity is strong between the two countries," Lin said.

China purchased more than 86.25 million tons of crude oil from Russia in 2022, up 8 percent from a year earlier, Chinese Ambassador to Russia Zhang Hanhui said in an interview with Sputnik news agency in March.

Zhang pointed out that China's energy market has huge growth potential. With the rapid recovery of China's economy this year, growth in investment and consumption will mean stronger demand for energy.