What they're not telling you: Authored by Antonio Graceffo via The Epoch Times, Despite sanctions and two wars, the yuan is losing ground, with much of its earlier rise tied to Russia and now reversing. The Kremlin drafted a memo this year outlining seven areas of potential economic convergence with Washington, including a proposed return to dollar settlement for Russian energy transactions. The stated rationale in the memo is that dollar integration would stabilize Russia’s balance of payments and foreign exchange markets.
# THE PETROYUAN MYTH: A CONVENIENT FICTION FOR FAILED ALTERNATIVES The death of petrodollar hegemony was always theater. Beijing's grand currency play—weaponized during Ukraine, amplified by every deglobalization cheerleader—collapsed precisely when tested. The yuan gained ground on Moscow's desperation, not structural superiority. Here's the brutal arithmetic: Reserve currencies don't topple through geopolitical will or sanctions theater. They require institutional depth, capital market liquidity, and—most damningly—trust. The yuan offered autocratic baggage instead. Russia didn't switch to petroyuan strength; it switched because it had no choice. That's not system replacement. That's exile. The real story? Dollar dominance survives not through invincibility but because alternatives remain fundamentally broken. Beijing learned what every challenger discovers: replacing reserve currency requires actually building something better, not just wishing America away. The petroyuan wasn't killed by Western power. It was killed by China's own capital controls.
What the Documents Show
Russia never actually wanted to transact business in yuan. Moscow only did so because it was cut off from the dollar system by sanctions and had no choice. The yuan was a fallback, not a preference. Russia’s desire to return to a dollar-denominated trade regimen is an implicit admission that the yuan-based arrangement failed to deliver monetary stability. It also demonstrates Russian President Vladimir Putin’s desire to decrease Russia’s dependence on China.
Follow the Money
Putin has many ambitions for Russia’s future, but among them is not for Russia to be the No. 2 power in a Beijing-centered world order. Heading into the U.S.–Iran conflict, many pundits believed it would bring about the demise of the dollar while accelerating the internationalization of the yuan. Bloomberg ran a piece titled “The Iran War Is China’s Global Payments Debut,” arguing it took four years of preparation after Ukraine, and this war, to make the yuan a serious contender. The South China Morning Post cited analysts saying disruptions from the war could accelerate a shift in oil trade and threaten the dollar’s long-held dominance. Deutsche Bank’s FX Managing Director Mallika Sachdeva wrote in March that the Iran war could be remembered as a catalyst for “erosion in petrodollar dominance, and the beginnings of the petroyuan.” However, none of these predictions came true.
What Else We Know
In fact, the Iranian Embassy in Zimbabwe posted that it was time to add the “petroyuan” to the global oil market, and Iran demanded that tankers be allowed passage only if trade was denominated in yuan. But to date, the only confirmation is from Lloyd’s List that two ships paid a toll, and there is no clear evidence that the toll was paid in yuan. Lloyd’s List has also not released the names of the ships; therefore, they may very well have been Chinese-flagged vessels that paid a toll, allowing China to claim that de-dollarization was underway. The logic behind their belief that dollar dominance would be damaged by this conflict was that the United States used sanctions and dollar-system exclusion as a primary weapon against Iran, just as it did against Russia. Every time Washington weaponizes the dollar, it gives non-Western countries an incentive to build off-ramps. Iran, China, and Russia all have a motive to route energy trade outside SWIFT and dollar settlement.
Primary Sources
- Source: ZeroHedge
- Category: Global Power
- Cross-reference independently — don't take our word for it.
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