48 tankers are bound for the US. Some are sailing for US Gulf without cargo bookings. I also discuss Petroyuan, Petrodollar, and BRICS related nonsense.
Bloomberg reports A Record Number of Supertankers Is Headed to Collect US Oil
Forty-eight vessels are bound for the country in the coming three months, according to data gathered Friday by Bloomberg. That’s the most in at least six years.
US producers are increasingly sending low-sulfur “light-sweet” oil overseas, while many domestic refiners prefer to fill their slates with heavier grades that yield more diesel-type fuels.
The glut of vessels racing to the US Gulf even includes ships heading to the region on a speculative basis without any cargo booking, an industry practice known as ballasting, according to EA Gibson, a London-based shipbroker.
Petrodollar Silliness
Amusingly, people still talk about the petrodollar or the demise of the petrodollar. Similarly, some claim the petroyuan will doom the dollar.
Both theories are wildly absurd.
Saudi Arabia accumulated US dollars not because oil was priced in dollars as many still ridiculously believe. Rather it was due toa combination of factors: The US was once the biggest oil importer, US treasuries are the most liquid asset in the world, Europe has no centralized bond market.
The US is now energy independent whereas China is increasingly dependent on the Mideast.
I have been writing about this for years.
- October 25, 2017: Gold-Backed Petro-Yuan Silliness: Reserve Currency Curse? “CNBC reports China has grand ambitions to dethrone the dollar. It may make a powerful move this year.“
- April 21, 2018: Petroyuan’s Crash at Birth – “The idea that the yuan will soon replace the dollar as the world’s reserve currency is ridiculous for currency reasons, political reasons, and economic reasons.“
- March 26, 2018: PetroYuan is a Huge US Success Story, Not a Chinese One “The huge irony in all the petroyuan hype is that it is a direct result of forthcoming US energy independence. That’s a US achievement, far bigger than the symbolic gain by China“
- May 7, 2020: Death of the Dollar Theories Circulate Endlessly “In the real world, let’s discuss what it takes to to be the world’s global reserve currency.“
- May 26, 2021: How Well is China Doing at Promoting Yuan Usage in Global Trade?
- End of U.S. Dollar Hegemony – Not
RMB Global Trade Usage Summary
- January 2014: 1.39%
- January 2015: 1.81%
- April 2019: 1.88%
- April 2021: 1.95%
That was from my May 26, 2021 report.
Chinese Yuan’s Market Share
In July of 2026, Goldman Sachs reported China’s currency rises in cross-border trade but remains limited globally
The U.S. dollar is still the dominant currency in international payments, accounting for 43% in May, according to SWIFT. Some 32% of international payments were in euros, 7% in British pounds, and 3.2% in Japanese yen.
China’s global market share increased to 2.5% as of May 2023, from 1.1% by the end of 2013.
China’s share was 1.1 percent in 2013. Ten years later it was 2.5 percent.
Yet several times every year, we see death of the dollar stories all due to a crash of the petrodollar, the rise of the petroyuan, or BRICS-related silliness.
Hoot of the Day
Canada (CAD) has a bigger international market share than China (CNY) !
But the stories will continue, and continue, and continue. The death of the dollar will perpetually remain six months away.
What Would it Take for a BRIC-Based Currency to Succeed?
Lost in the hype over BRICS dethroning or challenging the US dollar is total ignorance about the answer to this key question: What Would it Take for a BRIC-Based Currency to Succeed?
I list six conditions. See if you can figure out what some of them are.
Meanwhile, zero of them are in place and most likely never will be.
I keep reading silly articles about how BRICs is trying to develop a new currency to “challenge the US dollar”. This is, of course, pure, US-centered nonsense. BRICs is simply developing new, more reliable ways of transacting with each other that can’t be disrupted whenever the US feels like sanctioning someone else (which they seem addicted to doing). Russia, in particular, has been FORCED to have some other currency (or currencies) to transact in due to existing US sanctions -they can’t use the dollar.
Im no expert on this. However the short reading i’ve done has said that the oil in the US is basically dirty and US refineries aren’t designed for it thus we sell it to those that can and then import the sweet crude that were setup for.
Is that really energy independent? Maybe theres a lot more to it I dont know. I did find the swapping around of different types interesting thoh.
Next time. If there is a next time. Read the f’in article before you post another moronic comment.
Reade above: “US producers are increasingly sending low-sulfur “light-sweet” oil overseas, while many domestic refiners prefer to fill their slates with heavier grades that yield more diesel-type fuels.”
Another really sloppy ouija board “analysis” from one of Bloomberg’s social justice majors.
Refineries all over the US have closed, and President Bite-Me ™ has made sure no new refinery will be built in the US for at least the next five years.
Crude oil needs to be refined before use. So oil dealers are shipping the oil to where it can be refined. Everyone act shocked and surprised!!!!
Mish spent most of the post analysing why SWIFT — a USD based settlement system — is predominantly using USD. How is this relevant to oil tankers? Why would anyone expect payments made in other currencies to be routed through a politically weaponized settlement system?
If you measure TV viewing by the network ratings of the four old networks, you miss everyone watching netflix or hbo or countless online broadcasters. You get a very flawed idea of how many people are watching TV and what they are watching.
This SWIFT study doesn’t tell us anything about trade conducted outside of SWIFT. So it doesn’t tell us anything about non-USD trade, which might be going up or down and wouldn’t show here either way.
US is oil independent. US is rival to OPEC+ selling oil. So, this is buyers’ market.
OPEC+ will sell in Chinese Yuan or Indian Rupee, etc rather than dollar.
Trade in Crude Petroleum represent 4.52% of total world trade. So, I expect Yuan transaction is much more than 2 – 3%.
GB£ seems most disproportionally represented, more so than Canada.
Are those boats coming to get oil that was destined to land up in the SPR oil reserve?
‘demise of the petrodollar’ ? When your debt/GDP hits 300% somewhere ? But by then Europe’s might be 300% too and Japan’s 600%, all palliative in the same bed in other words ! ….What a fc kn crazy financial system, a Ponzi house of cards, how long before it ALL falls apart, THAT s the question ! Got gold ? …I do !
Have you calculated China’s debt to GDP? It is a world of debt. Has been for five hundred years, since the Venetians. Debt is not sacred. Bonds are traded and degraded all the time and eternally.
With regards to US energy independence: shale oil has lower energy output for energy input especially relative to Ghawar. Plus shale wells deplete pretty rapidly. We should be planning long term for energy needs based on sound engineering and economic practices. Instead we are pouring $Trillions down the rat hole of green energy graft and charlatanism.
Shale is a environmental disaster, Make up with Maduro ! I am sure your leaders are already working on it anyway…
Why would the Americans make up with Maduro when they can just sail in and take it?
Mish, how do you know what Goldman Sachs will report in 2026?
Mish, you continue to engage in hyperbole about the mighty US dollar. Things take a while to change, so you’ll be correct for a while. But the writing is on the wall. Actions have consequences and our war mongering, cultural arrogance and the weaponizing of the dollar has consequences. Just look at Blinken’s visits in the Middle East. It’s become fashionable to disrespect the US. That doesn’t reflect a position of strength or great fear of economic fallout. You are living in interesting times but you don’t realize it.
I actually agree with you, but in the late ‘70’s it was so bad that Foreigners didn’t want accept USD either. Also the disrespect was so off the charts the Iranians stormed our Embassy & took hostages for the better part of a year. I would reference Adam Smith on this one. To paraphrase, there’s a lot of ruin in a Nation.
Yes but that was a different time. The US was still a military and manufacturing power house and the cold war was still on. Today the world has changed and there are numerous countries which technical and manufacturing knowhow equivalent to ours. We sold off our seed corn so some Wall Street billionaires could make a killing.
Agree once again It was a totally different time The US wasn’t immersed in crushing debt levels either
How could I forget the debt! $100,000 for each US citizen. $200,000 for each US tax payer (with a median income of $46,000). Totally irresponsible, reckless spending without a care for the future. Thanks for pointing that out that glaring omission!
This is the most curious commenting section of them all. It seems if I upvote a comment, it adds to the total, and the opposite happens with downvote. So -5 and +5 equals zero. Mathematically correct, but looks like a elementary school student designed it, or maybe ChatGPT?
Actually it makes perfect sense. It is tabulating all the contributions from your split personalities and providing you with an individual contribution of +1, 0, or -1.
A minus one or a plus one is not significant. More than that is. In the previous version it was easy to game it by voting using different computers, tablets and telephones to vote how you want. I did the test and was able to upvote (myself) up to five times. This version looks better and I hope it prevents the pattern of votes I saw before.
looks rather like you always downvote yourself these days… that s your nasty character aint it, self laceration ! I d say you were once a high ranked military guy, were you ?
Aha! I figured it was you diddling the numbers!
It would be nice to see a total number of “votes” in addition to the net, but the post edit function is back so perhaps that will be enough for now.
This new vote register sucks.
The old system provided an indication of the level of interest according to the number of up and down votes.
This new system thinks that 3 up votes with 2 down votes is the same as 101 up votes with 100 down votes. The level-of-interest information has been lost.
I can’t believe that 301 people/bots reacted to your comment, while my earlier and equivalent comment netted a paltry 299.
Excellent, consistent analysis. 👍
So why doesn’t Saudi Arabia sell oil only in their own currency?
Where would you find the Rials to pay them?
That, and dollars are much preferred to Rials by all those they import from.
the EU pays in Ruble for Russian LNG …
Must be nice to make record profits and get lobbyist benefits from Congress while the pubic gets milked and taxed for it.
We have the best government money can buy!
When the balance of payments is balanced by foreigners acquiring net holdings of our equities, bonds, and real estate, and capital outflows (interest, dividends, rentals, etc.) exceed inflows, we are either decreasing our net creditor position in the world or increasing our net debtor position.
Beginning 1985 it has been the latter. The trade deficits, plus the unilateral transfer of funds by the Federal Government to foreigners (our far-flung military bases, etc.), transformed this country from this world’s largest creditor to the world’s largest debtor – for the first time since 1917. Since 1985 we now have a net debtor position exceeding 23 trillion dollars, but the principal villain (since 1973) was our dependence on foreign oil.
Wrong #. should be c. -17,414,685. That’s a lot of real estate.
When you are certain that you are eventually going to become bankrupt it is best to be a big-time debtor.
Turkey 2Y is 43%, the 10Y is 28%. Erdogan enslaved Turkey. Turkey industrial
hub competes with China. Both barter with other nations. Money is money and politics is politics. To divert attention China is circling Taiwan and Turkey support the Palestinians. The dollar is strong b/c enslaved frontier nation barters for oil or other commodities. They are not in the paper market. They trade real goods.
> The US is now energy independent
Any citation for this? Biden is actively working to make us energy dependant, and the power grid is stressed out over electric cars and “clean energy” that doesn’t produce as well as the shuttering coal plants.
Look at IEA imports and exports
How come I don’t get a picture like you? I feel somehow diminished.
Next you’ll want a banner under your handle!
This must be confusing news to the MAGA facts denial machine. After the Biden administration declared war on energy independence, oil production (and exports) has reached levels higher than under the Trump administration.
I think last winter would it looked like Europe might freeze, there was a serious turn around in the Biden Administration. All it takes is few bribes to the “big guy”.
Once one sinks below a minimum base line of comprehension and understanding of anything, which is the case for everyone in any position of power and influence in financialized dysopias; Biden and Trump included; there ceases to be any correlation whatsoever between what one says, wants, tries and attempts, and what one is actually doing.
Just like is the case with picking “investments”, where it makes not one iota of difference whether some illiterate Hedge fund billionaire tries his best to make money or lose money; neither does it make one iota of difference whether Biden wants to be mean or nice to “the oil industry.” All he’s actually going to do, is fall down the stairs either way. Ditto Trump: He’s just going to tweet something, about something he has no idea about. It’s what “elites” in Financialised dystopias do. The whole purpose of financialisation and central banks, is specifically to ensure not only that this is all “elites” do, but indeed that this is all they are capable of doing.
Perhaps this makes me a bad person, but, I love it when Biden falls down the stairs!
If we turn the question around and ask ourselves if we wanted the Dollar to no longer be the world’s reserve currency, then what would we have to do? I must admit it would be really hard to do but I do have a short list.
1) Balance imports and exports. In principle a good thing but we have no mechanism to do that and setting up a government agency to do it for us would be a nightmare. As Mish pointed out. People trade and not countries.
2) Controls on capital coming in and going out. Exactly what we need: more bureaucrats.
3) If we did 1 and 2 then what do we do with the big pile of Dollars held by foreigners?
In principal this sounds viable but in reality this will never happen under Dems or Reb
1)Prices and balances balance imports and exports. No “agency” required. No different than for individuals: Your wallet gets thinner, so you “import” less and work harder to “export” more.
2)Ditto capital flows: If you price yourself too high; by too high wages for your productivity or, more relevant these days, by having too many ambulance chasers and dilettante “investors” skim off the top; capital stops flowing in. Then starts coming back when the leeches are starved out, such that the whole is priced more competitively.
3)We’d compete for them. By competitively offering things those dollar holders value more than their dollars.
Americans could offer bonds and notes that pay interest for the dollars.
At maturity the proceeds from the bonds and notes should be used to buy more bonds and notes.
I have been following Brent Johnson. I know four of the primary answers and one of those is Dollar Denominated DEBTS, foreign held.