It seems world sanctions against Russia are working and yet at the same time they are having an unintended effect: Pushing Russia to increasingly use the Chinese renminbi as its currency of choice.

The fact Russia’s third-largest oil producer is now settling all of its sales to China in renminbi is perhaps the most clear indication yet that western sanctions are both working and driving an increase in the use of the Chinese currency by Russian companies.

The Kremlin’s “pivot to Asia” foreign policy, in response to western sanctions, has basically mandated a shift from the U.S. dollar to renminbi but until now there has been little clarity over just how much trade can actually be settled in the Chinese currency.

Gazprom Neft, the third largest oil producer in the country, announced on Friday that since the start of 2015 it had been selling in renminbi all of its oil for export down the East Siberia Pacific Ocean pipeline to China.

Up until last summer this contract had been settled in U.S. dollars.

Gazprom Neft, the oil arm of state owned Gazprom, responded faster than most. Alexander Dyukov, chief executive officer, announced in April last year that the company had secured agreement from 95 percent of its customers to settle transactions in euros rather than dollars, should they need to.

That statement, while obviously in retaliation for sanctions, was ambiguous as it only alluded to the fact this switch could be made and not that it had been made.

We now know the full extent of that switch. Gazprom Neft’s first-quarter results, issued last month, show the East Siberian Pacific Ocean pipeline accounted for 37.2 percent of the company’s crude oil exports of 1.6 million tons in the three months to March 31st.

That, to many experts, marks the rise of the “PetroYuan”.

According to influential financial newspaper FT, “other Russian energy groups have been more reluctant to drop the dollar for settlement of oil sales,” but the fact other Russian producers are currently considering a shift combined with officials in the U.S. and Europe openly discussing yet more economic sanctions all suggests that the settlements in renminbi will become more prevalent going forward.

This becomes even more fascinating when examining the latest Chinese crude oil import data, which shows their import of OPEC crude is falling dramatically while Russian crude is increasingly dramatically. Venezuela imports were down 11 percent while Saudi crude imports were down 8 percent. Russian imports soared 34 percent.

Just as Russian oil is rising as a percentage of total Chinese crude imports, these contracts are now being settled in renminbi.

The timing gets even more interesting as China is making a big push to only issue loans from its new investment bank (and IMF rival) in renminbi.

In short, China is now making a big push to rival the U.S. dollar as the world’s reserve currency. It won’t happen overnight, but large trade volumes are increasingly being done in Yuan, negatively affecting the value of the U.S. dollar.

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