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Over a fifth of global oil trade in 2023 was completed in currencies different from the U.S. dollar
More countries are shifting from decades-long petrodollar. Over a fifth of global oil trade in 2023 was completed in currencies different from the U.S. dollar. This trend is seen in Nigeria as well when operators in Nigeria are seeking ways to settle domestic oil and gas trade in naira, Sanctions are motivating countries to settle oil deals in other currencies. Also, the de-dollarization conundrum is gaining ground to shield local currencies from fluctuating against the dominant Greenback.
Countries such as Russia, China, and Iran were breaking the petrodollar rank as the U.S. dollar is getting some competition in commodities markets. China is projecting its currency as an alternative in global deals. Russia and Iran finalized an agreement to trade in their local currencies instead of the U.S. dollar. Significantly, China’s yuan is said to have become the fourth most popular international settlement currency. The country had in October completed a major international oil deal in digital yuan.
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In Nigeria, despite the shortage of the dollar and its inflationary measures, crude oil buyers for modular refineries have expressed worry over sourcing millions of dollars to purchase crude locally. The oil companies have called for a halt in the sale of gas in dollars. This demand has come mostly from modular refineries. They urged the Federal Government to urgently intervene to assist modular refineries in buying crude oil in naira.
