Beijing has built up the use of the yuan for the oil market and other international trade, giving Iran and Russia a way to evade Western sanctions.Beijing has built up the use of the yuan for the oil market and other international trade, giving Iran and Russia a way to evade Western sanctions.

The White House has entered talks with Iran over a new nuclear deal, relying on a traditional strength: the promise of sanctions relief and access to some of roughly $100 billion in frozen assets.

Yet, that leverage is waning. Tehran has blunted the U.S. sanctions campaign in recent years by successfully using China’s financial architecture—built on the yuan—that operates beyond Washington’s reach.

The shift was evident in late April when the U.S. escalated its “Economic Fury” campaign against Iran, sanctioning a major Chinese refinery it said bought billions of dollars’ worth of Iranian oil. The refiner,Hengli Petrochemical, said its supplier had guaranteed the oil wasn’t Iranian.

But it also put the U.S. on notice. Future oil purchases, Hengli said, would be settled in yuan instead of U.S. dollars, the energy market’s main currency—making it harder for outsiders to track the flows.

It was the latest sign of a troubling new development for Washington. More of the world’s illicit activity to evade sanctions is being handled in yuan, as China builds an alternative financial system aimed at weakening Washington’s power to dictate world affairs.

Full article- https://archive.ph/2Zaxi