Abstract: With its consumption of petroleum and natural gas increasing year by year, China has become an influential petroleum and natural gas consumer country in the world. Building a Yuan-based system for petroleum and natural gas transactions may enable RMB to play more important functions as a currency of quotation, settlement and investment for trade and investment in terms of international oil and gas. A Yuan-based system protects China from the Asian premium, enhances China's influence in global oil and gas market and ensures the safety of oil and gas supply for China. It also accords with the implementation of the "Belt and Road" initiative to reach a win-win solution between China and the international community. The internationalization of RMB can be conducted by improving the system for RMB cross-border trade settlement, building a regional center for petroleum and natural gas trading, launching major pilot projects for oil and gas trade and investment, developing RMB offshore market so as to ensure China's energy security, serve China's economic development, and improve China's competence in global governance.

Key words: petroleum and natural gas, RMB settlement system, oil security, petrodollar, trade cooperation