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Indian refiners to continue paying for Russian oil in dirhams
Despite new European Union (EU) sanctions and warnings from the United States, state-run Indian oil companies are expected to continue purchasing Russian crude using dirhams for payment, according to officials cited by Moneycontrol.
On 18 July, the EU lowered the price cap for Russian oil to $47.6 per barrel, down from the previous $60, as part of its 18th package of sanctions related to the ongoing conflict in Ukraine. Indian officials stated that these measures do not currently affect India’s procurement of Russian oil due to transactions routed through traders based in the United Arab Emirates (UAE).
A senior refinery executive told Moneycontrol, “EU sanctions would not have a direct impact as of now because we are buying through UAE traders.”
Impact of US tariff threats and payment shifts
On July 30, US President Donald Trump announced increased tariffs on India and alluded to further penalties related to New Delhi’s defence and energy trade with Moscow. He reiterated these warnings on 4 August, stating on Truth Social that India profits from reselling Russian oil and criticised its stance on the Ukraine conflict.
Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) are among the refiners involved. One executive confirmed, “We were not making dollar payments even with a $60 price cap… Russian oil purchase is done through UAE traders in AED.”
Another government official stated that Indian refiners are not currently exploring alternative currencies for these transactions and that no progress has been made on rupee-rouble settlement mechanisms.
Rising reliance and market trends
India’s share of Russian crude imports rose sharply from 0.2 percent before the war in Ukraine to around 35–40 percent of total crude imports. Petroleum Minister Hardeep Singh Puri indicated in July that India could revert to earlier sourcing practices if secondary sanctions are imposed.
Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) are among the refiners involved. One executive confirmed, “We were not making dollar payments even with a $60 price cap… Russian oil purchase is done through UAE traders in AED.”
Another government official stated that Indian refiners are not currently exploring alternative currencies for these transactions and that no progress has been made on rupee-rouble settlement mechanisms.
Rising reliance and market trends
India’s share of Russian crude imports rose sharply from 0.2 percent before the war in Ukraine to around 35–40 percent of total crude imports. Petroleum Minister Hardeep Singh Puri indicated in July that India could revert to earlier sourcing practices if secondary sanctions are imposed.
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