Russia on Tuesday signed an agreement with China's National Petroleum Corporation that will pave the way for payments in both Chinese currency yuan and Moscow's rouble, instead of the US dollar, which has been considered a 'universal currency' for trade following the creation of the Bretton Woods agreement post-World War II.
With this deal, Russia aims to tap into new markets, non-Western countries including China for its vital hydrocarbon or gas exports.
The move will further bring the two countries closer in the wake of Western sanctions against Russia following its invasion of Ukraine. It's also seen as a push by Kremlin to reduce reliance on the US dollar, euro and other western currencies for trade.
Russia's Gazprom, a majority state-owned multinational energy corporation, said allowing payments in Russian roubles and Chinese yuan was 'mutually beneficial' for both countries and will make calculations easier.
"The new payment mechanism is a mutually beneficial, timely, reliable and practical solution,” Gazprom CEO Alexei Miller was quoted as saying by Al Jazeera.
The efforts will bolster China-Russia efforts in areas of bilateral economic and trade cooperation that will possibly lead to a new economic alliance that may challenge the West's hegemony.
Officials and businesses from the two countries will also use the 'Eastern Economic Forum (EEF), being hosted by Russia currently, to discuss further cooperation in areas of investment.
The Russia-Ukraine war saw the European Union imposing sanction packages against Moscow targeting its energy industry which is a vital source of its revenue.
Western countries also tried reducing their dependency on Russian oil and gas including Germany and Italy--the largest importers till last year.
The sanctions on Russian gas also led to a hike in fuel prices worldwide.
In response, Kremlin reduced and later cut off gas supply indefinitely via Nord Stream 1 pipeline to Europe citing 'technical problems' leading to an energy crisis in the West.
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