India Saves Billions as Russian Sanctions Drive Oil Prices Down
The imposition of U.S. sanctions on Russia has facilitated India and other developing nations in acquiring crude oil at reduced prices.
These sanctions were enforced by the Biden administration as a response to Russia’s invasion and war against Ukraine, with the intention of impeding Russia’s local economy by prohibiting international business transactions.
One significant restriction prevents countries from utilizing the U.S. dollar for cross-border settlements with Russia. In this context, a recent oil agreement was established among Russia, China, and India, all of which are members of the BRICS alliance.
Despite the sanctions, Russia has been circumventing them by accepting the Chinese Yuan as payment for crude oil, enabling oil laundering to China and Saudi Arabia. As a result, China and Saudi Arabia have been re-exporting Russian crude oil to other nations at discounted rates due to the imposed sanctions. These transactions no longer rely on the U.S. dollar, making it more affordable for other countries to acquire oil.
India has capitalized on the U.S. sanctions against Russia by actively purchasing crude oil at lower prices. Since February 2022, India has procured $186.45 billion worth of crude oil from Russian suppliers using laundered oil from China.
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Furthermore, India has saved $7.37 billion in foreign exchanges over the course of 14 months as a result of these transactions, as paying in U.S. dollars would have amounted to $193.82 billion. Crude oil transactions with China were settled using the Chinese Yuan rather than the U.S. dollar.
Indian refiners, including the Indian Oil Corp (IOC), made payments for oil using the Chinese Yuan. This arrangement was necessary because India is prohibited from conducting direct business with Russia due to the U.S. sanctions.
Additionally, the government led by President Putin is actively seeking alternative means to conduct business with global partners without relying on the U.S. dollar. The BRICS group supports the Russian economy by facilitating business transactions using the Chinese Yuan.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
