According to Yonhap News Agency, South Korea’s Ministry of Trade, Industry and Energy confirmed that it has verified with the United States government that there are no settlement or sanctions-related issues when importing petroleum products of Russian origin. South Korea may consider importing Russian naphtha in the future.
Expansion of Non-USD Settlement Options
The Ministry stated that, through its Ministry of Economy and Finance, it confirmed with the U.S. Department of the Treasury that South Korea is allowed to use Chinese yuan (RMB), Russian ruble, and UAE dirham for importing Russian crude oil and petroleum products. Such transactions are not considered secondary sanctions violations by the United States.
Analysts suggest that, with settlement and sanctions concerns clarified, domestic companies may now consider importing Russian crude oil and petroleum products such as naphtha. However, officials emphasized that challenges remain regarding crude oil imports, including product quality, transaction reliability, and the feasibility of completing transactions within a one-month timeframe. Therefore, further observation of refiners’ responses is necessary. In contrast, imports of Russian naphtha are considered more likely.
Developments in Iran and Regional Energy Trade
Earlier reports from multiple foreign media outlets indicated that Iran is negotiating with several countries regarding the possibility of allowing certain oil tankers to pass through the Strait of Hormuz, provided that the oil cargo is settled in Chinese yuan (RMB).
A contributor to the Telegram channel “Iran Journalist Diary,” Khayal Muazin, also claimed that the Japanese government has agreed to make payments in RMB to Iran in exchange for unhindered passage of its vessels through the Strait of Hormuz in the near term.
Discussions on the “Petrodollar System”
As tensions between the United States, Israel, and Iran continue to escalate, oil prices remain elevated. Discussions about the weakening foundation of the “petrodollar system” and the potential rise of a “petro-yuan” system have resurfaced.
The latest catalyst for this discussion comes from a research report by Deutsche Bank, which suggests that the long-term impact of the Iran conflict on the U.S. dollar may lie in testing the structural foundations of the petrodollar system.
The report notes that if the United States no longer relies heavily on Middle Eastern oil, Gulf countries continue to explore non-USD settlement mechanisms, and global energy systems increasingly localize and shift toward renewable sources, the U.S. dollar’s status as a global reserve currency could face significant pressure. This environment may also create favorable conditions for the internationalization of the Chinese yuan in energy trade.
Structural Shifts in Global Energy Trade
However, analysts generally believe that within the next decade, the dominance of the petrodollar system is unlikely to be fundamentally displaced. Nevertheless, ongoing non-USD settlement practices among sanctioned oil-producing countries, diversification efforts by major exporters such as Saudi Arabia, and the continued internationalization of the RMB are gradually reducing the dollar’s monopoly in global energy trade.
The United States has undergone a structural shift in energy markets due to the shale revolution, achieving energy independence and becoming a net exporter of crude oil and petroleum products in September 2019, according to the U.S. Energy Information Administration.
At the same time, Asia has become the primary destination for Middle Eastern oil exports. According to Deutsche Bank data, approximately 85% of Middle Eastern crude oil is now exported to Asia. Saudi Arabia, for example, exports roughly four times more oil to China than to the United States.
Countries such as Russia and Iran, which are subject to U.S. sanctions, have increasingly conducted oil trade outside the USD system. Russian oil exports are largely settled in rubles and RMB, while Iran has also promoted the use of non-USD currencies, further weakening the dollar’s dominance in energy trade.
Saudi Arabia and Financial Diversification
Saudi Arabia is actively advancing its “Vision 2030” strategy to reduce dependence on oil and enhance strategic autonomy. In the defense sector, the country plans to increase the localization rate of military expenditures from 4% in 2018 to over 50% by 2030.
In the financial sector, Saudi Arabia officially joined the mBridge project in June 2024. mBridge is a multi-central bank digital currency (CBDC) cross-border payment initiative jointly initiated in 2021 by the Bank for International Settlements Innovation Hub, the Digital Currency Institute of the People’s Bank of China, the Hong Kong Monetary Authority, the Central Bank of Thailand, and the Central Bank of the United Arab Emirates. The project aims to build a distributed ledger-based cross-border settlement platform for multiple central bank digital currencies.
As of November 2025, the mBridge platform has processed 4,047 transactions with a total value of USD 55.49 billion, with the digital yuan accounting for more than 95% of total activity. The platform provides participating countries with an alternative cross-border settlement channel independent of the SWIFT system.
