Traders selling Russian oil have started requiring payments from India’s state-owned refineries in Chinese yuan, reports Baltimore Chronicle with reference to Reuters. One company has already completed payments for several shipments of Russian crude in the Chinese currency.
According to agency sources, India’s leading state-controlled oil company, Indian Oil Corp, recently made payments in yuan for two to three shipments of Russian crude. The use of alternative currencies, such as the yuan and UAE dirham, has increased following Western sanctions imposed on Russia in 2022, which affected oil transactions previously dominated by the U.S. dollar.
In 2023, some Indian state-owned refineries conducted payments in yuan for Russian oil, but stopped due to the Indian government’s concerns amid rising tensions with China. Private refineries, however, continued using the Chinese currency.
Currently, traders who previously converted payments in dirhams or dollars into yuan for direct payments to Russian producers are seeking to simplify the process and avoid the costly conversion steps. Reuters sources also noted that Russian oil prices are set in U.S. dollars to comply with European Union price caps, while payments in yuan allow traders to receive the equivalent amount in Chinese currency.
Paying in yuan expands access to Russian oil for India’s state-owned refineries, as some traders no longer accept other currencies.
Earlier we wrote that India demands U.S. permission for Iran and Venezuela oil to reduce Russian imports.
