“This format is the result of the announcement made on September 7th by the President [Nicolas Maduro]... that Venezuela will implement new strategies to free the country from the tyranny of the dollar,” the Venezuelan Oil Ministry said in a statement.

The decision to move to Chinese currency was made last week as a way to get around the sanctions imposed on Venezuela by the US government in August, which froze some Venezuelan assets and prohibited American citizens from doing business with the country.

This has hurt Venezuela’s oil exports at a time when the country is facing a severe economic crisis. At the time, the White House said the sanctions were “carefully calibrated to deny the Maduro dictatorship a critical source of financing”.

“The market is dominated by transactions with the US dollar, and we must develop other ways to conduct international transactions,” Finance Minister Ramon Lobo told VTV earlier.

Venezuela’s decision follows plans announced by China to start a crude oil futures contract priced in yuan and convertible into gold, which could lead to the emergence of a new Asia-based crude oil benchmark.

As China is the world’s biggest crude buyer, the new contract may allow exporters to bypass American sanctions by trading oil in yuan, something that has interested countries such as Russia and Iran.

“In 2012, Iran began to accept yuan for its oil and gas payments, followed by Russia in 2015,” political writer Dan Glazebrook wrote in a column for RT in June.

“If this takes off, this could literally spell the beginning of the end of US global power. The dollar is the world's leading reserve currency, in the main, only because oil is currently traded in dollars. Countries seeking foreign exchange reserves as insurance against crises within their own currencies tend to look to the dollar precisely because it is effectively ‘convertible’ into oil, the world's number one commodity.”