INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Indian refiners have started paying for certain oil imports from Russia in Chinese yuan, Reuters reported quoting sources on
This move comes as Western sanctions on Moscow and its customers have prompted them to seek alternatives to the dollar for settling
payments.The imposition of sanctions on Russia over its invasion of Ukraine has disrupted global trade flows for its primary export, with
India emerging as the largest buyer of Russian seaborne oil
In June, India's imports of Russian oil reached a new all-time high
According to Viktor Katona, the head of crude analysis at Kpler, daily volumes of Russian oil climbed to 2.2 million barrels, marking the
tenth consecutive month of increase
Data from the analytics firm indicate that Russian purchases once again surpassed the combined shipments of Saudi Arabia and Iraq.However,
India has been grappling with how to pay for these imports due to the shifting sanctions landscape.Traditionally, the US dollar has served
as the main global oil currency, including for India's purchases
But, since the invasion of Ukraine, Chinese yuan is increasingly playing a significant role in Russia's financial system because Moscow has
been excluded from the dollar and euro financial networks by international sanctions.China has already transitioned to using the yuan for
the majority of its energy imports from Russia.According to three sources familiar with the matter, Indian Oil Corp, the largest purchaser
of Russian crude oil in India, became the first state refiner in June to make yuan payments for certain Russian purchases, the Reuters
reported on Monday."Some refiners are paying in other currencies like yuan if banks are not willing to settle trade in dollars," an Indian
government source told Reuters.Indian oil refiners have been exploring various currencies, including United Arab Emirates dirhams, rubles,
and rupees, to settle payments for discounted crude
These payment arrangements can be exempted from international restrictions as long as the trades are priced below the $60-per-barrel price
cap established by the Group of Seven nations and their European Union partnersIt remains unclear how much Russian oil Indian refiners have
bought using yuan, although sources indicated that Indian Oil has made yuan payments for multiple cargoes.Following the imposition of
sanctions on Moscow, Indian refiners predominantly sourced Russian crude from Dubai-based traders and Russian oil companies such as Rosneft,
Lukoil's Litasco unit, and Gazprom Neft, according to shipping data compiled by Reuters.While Western sanctions against Russia are not
officially recognized by India, and its purchases of Russian oil may not violate them, Indian banks remain cautious about facilitating
payments for such imports.(With inputs from Reuters)
