African energy trade tests non-dollar settlement

The move comes as energy markets remain elevated and volatile. XLE, the energy sector ETF, has climbed to 63.96, far above its 50-day moving average of 58.36 and its 200-day moving average of 53.97, showing investors continue to pay up for oil exposure. USO, the oil ETF, finished at 133.70, also well above its 50-day average of 121.35 and 200-day average of 106.07. Those levels suggest the market is still pricing in a tighter crude backdrop, which gives exporting states more leverage to experiment with alternative settlement arrangements.

At the same time, the dollar’s tone has been uneven. Adalytica’s US Dollar Trade Signals showed neutral sentiment at 49, with awareness at 58, after a sharp 7-day improvement but a negative 30-day change. That leaves room for policy makers and traders to question how durable dollar strength will be as a transactional anchor. In the geopolitical backdrop, Adalytica’s Global Stability Sentiment sits at 74, but awareness is only 4, reflecting a market that looks complacent even as de-dollarization risks build in the background.

For African energy producers, the attraction is as much political as financial. Dollar dependence leaves them exposed to US monetary policy and to the dominance of Western payment rails, both of which can become tools of leverage in periods of sanctions pressure or diplomatic tension. For buyers, especially in Asia and parts of the Global South, settlement in local currencies, yuan or other non-dollar units can be a way to secure supply, reduce transaction costs and diversify reserve usage.

The bull case is that de-dollarization improves resilience and broadens market access, especially for producers that want to attract investment from non-Western partners or trade outside traditional US-centric banking channels. The bear case is that alternatives can be expensive, illiquid and operationally messy, with currency mismatches and hedging costs potentially offsetting any political advantage. The broader the shift, the more it could pressure the dollar’s role in commodity trade without fully replacing it.

For investors, the main implication is that energy cash flows in Africa may become more policy-sensitive and less mechanically tied to the dollar cycle. That has consequences for sovereign debt, local-currency bond markets, energy-linked equities and commodity traders that rely on stable invoice currencies. The next catalysts will be whether large African exporters, refiners and state-owned firms start signing more contracts outside the dollar system, and whether those deals scale beyond symbolism into repeatable trade flows.