Chinese President Xi Jinping and Saudi Arabia's King Salman bin Abdulaziz Al Saud. Photo: Reuters / Lintao Zhang

Chief economist and managing director at High Frequency Economics, Carl Weinberg, told CNBC this week that yuan pricing of oil is on the horizon.

“I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them.”

He added that such a shift would lead to less demand for US securities across the board.

“Moving oil trade out of dollars into yuan will take right now between $600 billion and $800 billion worth of transactions out of the dollar… (That) means a stronger demand for things in China, whether it’s securities or whether it’s goods and services. It is a growth plus for China and that’s why they want this to happen.”

As part of their campaign to pressure Riyadh, China has been progressively importing less and less oil from Saudi Arabia in recent years. There is also support among other nations, including Russia, for moving away from US dollar pricing of oil.

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