India starts paying for Russian oil in Yuan
Some Indian refineries have paid in Chinese yuan for a portion of crude shipments purchased from Russia, sources told Reuters, as Moscow seeks alternatives to the US dollar amid sanctions and India looks to buy crude at discounted prices.
India has become a major customer of Russian crude, alongside China, after Western sanctions and caps on Russian oil prices. India's crude oil imports from Russia are estimated to have hit a new record of 2.2 million barrels per day (bpd) in June, after surging for 10 consecutive months.
More than a year into the Russian invasion of Ukraine, India has transformed from a marginal buyer of Russian crude to a major market for Moscow's oil alongside China . Indian refiners, breaking the G7-imposed price limit and looking for opportunistic low-cost purchases, have hoarded many of the Russian Urals cargoes, which were destined for northwestern Europe before the EU embargo.
State-owned giant Indian Oil Corporation was the first Indian state-owned refiner to pay for Russian crude in yuan in June, according to three Reuters sources. In recent weeks, at least two of three privately owned refiners have settled crude oil transactions in yuan, other sources told Reuters.
Indian refiners' first preference is to pay in US dollars, but if this is not possible, for example because banks are unwilling to settle transactions with Russia in dollars, payments are made in other currencies, such as dirhams of the United Arab Emirates or in Chinese yuan, an unnamed government source told Reuters.
The yuan payments for Russian crude are part of efforts by Russia and China to sideline the US dollar as the currency of choice in international trade.
Over the past year, Russia has turned to trade in yuan following Western sanctions on its energy exports, imports and trade, as the Chinese currency has become Putin's only alternative to reduce exposure to the US dollar and to the euro and limit the consequences of the sanctions that saw the seizure of Russian state assets in Western countries.
Thanks to our Telegram channel you can stay updated on the publication of new articles from Economic Scenarios.
The article India starts paying for Russian oil in Yuan comes from Scenarios Economics .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lindia-inizia-a-pagare-il-petrolio-russo-in-yuan/ on Mon, 03 Jul 2023 15:26:45 +0000.