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India Doesn’t Want Its State Refiners To Pay For Russian Oil In Chinese Yuan? Some Payments Held Up
The Indian government’s reluctance to permit state-controlled refiners to pay for Russian oil imports with Chinese currency has led to payment delays for at least seven shipments, sources familiar with the matter told Reuters. Despite the payment dispute, Russian companies like Rosneft continue to provide oil to Indian refiners. India has become the leading importer of Russian seaborne oil this year, taking advantage of discounted prices following the suspension of Russian oil imports by some Western nations due to the Ukraine conflict, the report said.
The issue arises when refiners encounter difficulties settling their trade with Moscow, given the price cap of $60 a barrel imposed by the United States and the European Union on Russian oil. To navigate this cap, buyers have turned to alternatives such as Emirati dirhams for cargoes exceeding the limit as oil prices rise.
In July, it was reported that Indian refiners began using Chinese yuan for some Russian oil payments while continuing to use dollars and dirhams for most of their Russian oil purchases. However, the Indian government has expressed discomfort with using yuan for payments, the report quoted two finance ministry officials saying. Officials at affected refiners have noted that payment for at least seven shipments is still pending, some of which have been outstanding since late September.
It remains unclear whether the government explicitly instructed state refiners to cease using yuan, but it is evident that New Delhi does not approve of this practice. A government official stated that while it is not prohibited, the government neither encourages nor facilitates such trade.
Most of the Russian oil purchased by Indian refiners comes from traders, with some direct purchases from Russian entities. While traders have been willing to negotiate deals in dirhams, Russian sellers have insisted on yuan.
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